Model
PERS
Financial Statements
2009 edition
www.myAXP.com
Copyright © 2007 - 2009. All rights reserved. AXP Solutions Sdn. Bhd. Printed in Malaysia.
FOREWORD
In 2007, AXP issued Model Financial Statements for Financial Reporting Standards (“FRS”) and received
encouraging responses from customers and other Audit Practitioners. It was also suggested that we should
prepare Model Financial Statements for Private Entity Reporting Standards (“PERS”) as well.
In response, and as part of our mission to assist Audit Practitioners to resolve contemporary issues, we have
therefore prepared Model Financial Statements for PERS (“Model FS (PERS)”). Our aim is to assist both our
existing auditing clients and other Audit Practitioners and companies to audit and/or prepare statutory
financial statements that are in compliance with prevailing financial reporting and disclosure requirements of
the Companies Act 1965 (“CA”) and Malaysian PERS.
The MASB issued Exposure Draft 52 Private Entity Reporting Standards in 2006, and IASB issued Exposure
Draft of the proposed International Financial Reporting Standards for Small and Medium-sized Entities (“IFRS
for SMEs”) in 2007.
On 9 July 2009, IASB issued IFRS for SMEs. However, MASB’s revised PERS has not been finalised at the date
of publishing our Model FS (PERS). Thus, our Model FS (PERS) are prepared on the basis of existing MASB
Approved Accounting Standards for Private Entities.
Our Model FS (PERS) are based on a fictitious group of companies called Model Group Sdn. Bhd. and its
subsidiaries for the financial year ended 31 December 2009. We trust that you will find this publication a useful
reference point when you are auditing or preparing statutory financial statements in compliance with PERS.
While every effort has been made to ensure that our Model FS (PERS) demonstrates all the possible presentation
and disclosure requirements of the PERS, it should not be used as a substitute for the laws, regulations and
existing body of PERS. However, should you have any questions on the application of any of the statutory or
financial reporting requirements not presented in this publication, you are welcomed to contact our Technical
Support Unit for assistance.
REFERENCES IN THIS PUBLICATION
To the left of each disclosure items, references are made to CA or PERS. Requirements under the CA are shown
with “CA”, and requirement under Ninth Schedule of the CA are shown with “CA9”. If the disclosures are
required under both CA and PERS, references are only made to PERS. Where there are alternative applications
allowed under the PERS, we have also presented the alternative disclosures throughout this publication for
your reference.
SCOPE OF THIS PUBLICATION
Our Model FS (PERS) covers PERS issued by the MASB applicable to all accounting periods commencing on or
after 1 January 2009, as follows:
PERS
Descriptions
MASB 1
MASB 2
MASB 3
MASB 4
MASB 5
MASB 6
Presentation of Financial Statements
Inventories
Net Profit or Loss for the Period, Fundamental Errors and Changes in Accounting Policies
Research and Development Costs
Cash Flow Statements
The Effects of Changes in Foreign Exchange Rates
PERS
Descriptions
MASB 7
MASB 9
MASB 10
MASB 11
MASB 12
MASB 14
MASB 15
MASB 16
MASB 19
MASB 20
MASB 23
MASB 25
MASB 27
MASB 29
MASB 31
MASB 32
IAS 25
MAS 5
Construction Contracts
Revenue
Leases
Consolidated Financial Statements and Investments in Subsidiaries
Investments in Associates
Depreciation Accounting
Property, Plant & Equipment
Financial Reporting of Interests in Joint Venture
Events after the Balance Sheet Date
Provisions, Contingent Liabilities & Contingent Assets
Impairment of Assets
Income Taxes
Borrowing Costs
Employee Benefits
Accounting for Government Grants and Disclosure of Government Assistance
Property Development Activities
Accounting for Investments
Accounting for Aquaculture
However, our Model FS (PERS) does not include the presentation and disclosure requirements of:
PERS
Descriptions
MASB 28
MASB 30
IAS 29
IB-1
Discontinuing Operations
Accounting and Reporting by Retirement Benefit Plans
Financial Reporting in Hyperinflationary Economies
Preliminary and Pre-operating Expenditure
AXP has exercised professional due care and diligence in the preparation of our Model FS (PERS). However,
the information contained herein is intended to be a general guide. While every effort has been made to ensure
accuracy, no liability is accepted by AXP or any member of AXP on any grounds whatsoever to any party in
respect of any errors or omissions, or any action or omission to act a result of the information contained in our
Model FS (PERS).
ABOUT US
AXP was formed in 2005 by a team of qualified accountants with years of extensive experience in both the
public practice and commercial sector. Through extensive research and development since 2001 under both its
predecessor and AXP, we have successfully developed in-house a wide range of IT tools and solutions for Audit
Practitioners. Besides being able to optimise the business value of IT in the audit practice, our products also
possess enhanced features and updates that are in full compliance with the requirements of the prevailing FRS
and PERS.
ABOUT THE EDITORIAL TEAM
The editorial team of this publication consists of both AXP’s Technical Adviser and Business Partners, who
jointly possess a vast experience in financial reporting and wide exposure to the accounting industry in general.
The profile of each team member is as follows:
Keith Farmer, FCA, B.A., Technical Adviser of AXP, holds an honours degree in Economics and became a
Fellow of the Institute Chartered of Accountants in England and Wales (“ICAEW”) in January 1983. He taught
in London at the London School of Accountancy and Emile Woolf College and at the University of Essex until
he came to Asia in early 1994. He has been based in Asia ever since.
His specialist subject is Financial Accounting. He has conducted courses for both students and practitioners in
many parts of the world, including the UK, Malaysia, Singapore, Hong Kong, Kenya, and Mauritius for both
private colleges and the Association of Chartered Certified Accountants (“ACCA”). His students have
consistently won numerous prizes in the ACCA examinations.
Whilst Keith is justifiably proud of individual student performance, his key aim is to convey a fundamental
understanding of the basic principles and concepts which underlie financial accounting and a detailed
knowledge and application of the requirements of accounting standards. This is based on the three core
principles of education: instruction, demonstration and experience. Understanding is important, in fact it is a
prerequisite to developing the level of knowledge required to sit examinations with confidence and inspires
individuals to achieve far more than they ever expected in far less time than they ever anticipated.
In furtherance of achieving his aim, Keith has recently embarked upon a three point strategy. Firstly, he is
writing a series of books, primarily aimed at students, covering consolidation and accounting standards which
contain numerous progressive worked examples. Secondly, he is currently engaged in developing a series of
DVD's which, together with the books, will form an integral part of a new co-ordinated learning package.
Finally, in the near future, this learning package will be extended to a structured continuing professional
development programme.
Ivan Er Soon Lock, C.A.(M), FCCA, B.Com(NZ), is a member of the Malaysian Institute of Accountants (“MIA”)
and a fellow member of ACCA. Ivan first joined Deloitte KassimChan (“DKC”) in 1997 as an audit assistant,
and subsequently became an Audit Manager. He left DKC in 2003 to join Horwath, another international public
practice. At Horwath, he was soon promoted to become an Audit Principal.
His experience includes managing the audit and the corporate finance functions and the setting up of the
business improvement division of the practice, assisting companies listing on the stock exchange by providing
consultancy services on listing exercise and financial management, advising on good accounting and internal
control systems to a wide range of companies, provision of technical training on FRS and PERS and conducting
due-diligence review on companies in Malaysia and China. Currently, he is also an independent director of a
company listed on the MESDAQ Market of the Bursa Malaysia.
Eric Chia Kok Haur, C.A.(M), C.A.(NZ), B.Com(Hons), is a member of the MIA and New Zealand Institute of
Chartered Accountants (“NZICA”). Eric started his career as an audit assistant with DKC in 1997. He was an
Assistant Audit Manager when he left the firm to join KPMG Singapore in 2000. He was also an Assistant Audit
Manager at KPMG, where he served until 2003. From KPMG, he moved on to H W Kuah & Co., another public
practice in Singapore, as the Audit Manager.
Eric is well-versed with the financial reporting environment of both Malaysia and Singapore. In addition, as he
has spearheaded major audit assignments in China, he is also familiar with China financial reporting
requirements. His experience includes managing audit and due diligence assignments, monitoring the
budgetary function of the practice, provision of advisory services for corporate exercises and corporate
governance matters, preparation and review of published financial statements, including those of significantly
large groups of companies, and conducting training on technical subjects.
CONTACT US
AXP Technical Support Unit
Corporate Headquarters
83A, Jalan Emas Satu, Taman Sri Skudai, 81300 Johor Bahru, Johor, Malaysia.
Tel: 1300-882 AXP (1300-882 297) or 607-557 5722
Fax: 607-557 7697
Central Malaysia
C-2-16, SME Technopreneur Centre Cyberjaya, 2270, Jalan Usahawan 2, 63000 Cyberjaya, Selangor, Malaysia.
Tel: 1300-882 AXP (1300-882 297) or 603-8315 6168
Fax: 603-8315 6198
Singapore
Blk 4008, Ang Mo Kio Ave 10, #01-10A, TechPlace 1, Singapore 569625.
Tel: 65-6876 7297
Fax: 65-6454 7660
support@myAXP.com
1300-882-AXP (1300-882-297)
Copyright © 2007 - 2009. All rights reserved. AXP Solutions Sdn. Bhd.
No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by
any means, electronic, mechanical, photocopying, recording, scanning, or otherwise without the prior written
permission of the publisher. However, written permission need not be obtained from the publisher if it is used
internally within the Firm.
PERS Ref.
1.46(a)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
TABLE OF CONTENTS
Page No.
Report of the Directors
1–5
Statement by the Directors
6
Statutory Declaration
6
Independent Auditors’ Report to the Members
7–8
Financial Statements
Balance Sheets
Income Statements – Expenses Classified by Function
Income Statements – Expenses Classified by Nature
Statements of Changes in Equity
Cash Flow Statements – Indirect Method
9 – 10
11
12
13 – 14
15 – 16
Notes to the Financial Statements
General Information
Basis of Preparation
Significant Accounting Policies
Property, Plant and Equipment
Investment Property
Land Held for Development
Goodwill
Other Intangible Assets
Subsidiaries
Investment in Associates
Investment in Jointly-Controlled Entities
Other Investments
Deferred Tax Assets/Liabilities
Property Development Costs
Inventories
Trade and Other Receivables
Gross Amount Due from Customers
Fixed Deposits with Licensed Banks
Cash and Bank Balances
Trade and Other Payables
Gross Amount Due to Customers
Hire Purchase and Finance Lease Payables
Bank Overdrafts and Other Bank Borrowings
Provisions
Share Capital
Share Premium
Revaluation Reserves
Translation Reserves
17
17
17 – 26
27 – 30
30 – 31
31
32
33 – 34
34 – 36
36 – 38
38 – 39
39
40 – 41
41 – 42
42
43
43
44
44
44
45
45
46
46 – 47
47 – 48
48
48
49
PERS Ref.
1.46(a)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
Page No.
Retained Profits
Retirement Benefit Obligation
Revenue
Profit Before Tax
Income Tax Expense
Dividends
Acquisition of Subsidiary
Disposal of Subsidiary
Purchases of Property, Plant and Equipment
Cash and Cash Equivalents
Commitments
Contingent Liabilities
Events Subsequent to the Balance Sheet Date
Authorisation for Issue of the Financial Statements
49
49 – 51
52
52 – 55
55 – 56
56
57 – 58
59
59
60
60 – 61
61 – 62
62
62
PERS Ref.
1.46(a)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
REPORT OF THE DIRECTORS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
CA Ref.
The directors hereby submit their report together with the audited financial statements of the
Group and the Company for the financial year ended 31 December 2009.
169(6)(b)
PRINCIPAL ACTIVITIES
The principal activities of the Company are that of investment holding and provision of
management services to its subsidiaries. The principal activities of the subsidiaries are described
in Note 9 to the Financial Statements. There have been no significant changes in the nature of the
activities during the financial year.
169(6)(c)
RESULTS
THE GROUP
RM
THE COMPANY
RM
Profit for the financial year before minority interest
Less: Minority interest
6,998,600
(156,807)
171,854
-
Net Profit for the financial year
6,841,793
171,854
169(6)(p)
In the opinion of the directors, the results of the operations of the Group and the Company during
the financial year have not been substantially affected by any item, transaction or event of a
material and unusual nature.
169(6)(h)
DIVIDENDS
On 1 April 2009, the Company paid a 10% final tax exempt dividend (total dividend of
RM1,105,020) in respect of the previous financial year. The net dividend per share was 10 sen.
On 31 August 2009, the directors declared a 10% interim tax exempt dividend (total dividend of
RM1,132,020) in respect of the current financial year. The dividend was paid to the shareholders
registered on 31 October 2009. The net dividend per share was 10 sen.
The directors have proposed a 10% final tax exempt dividend in respect of the current financial
year. The dividend is subject to approval by the shareholders at the forthcoming Annual General
Meeting and has not been included as a liability in the financial statements. Total dividend
payable is RM1,132,020, and the net dividend per share is 10 sen.
If the Company did not declare dividends:
No dividends have been paid or declared since the end of the previous financial year. The
directors do not recommend that a dividend to be paid in respect of the current financial year.
169(6)(d)
RESERVES AND PROVISIONS
There were no material transfers to or from reserves or provisions except as disclosed in the
Financial Statements.
1
PERS Ref.
1.46(a)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
REPORT OF THE DIRECTORS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
CA Ref.
169(6)(e)
SHARES AND DEBENTURES
During the financial year, the authorised share capital of the Company has been increased to
50,000,000 ordinary shares by the creation of 10,000,000 ordinary shares of RM1 each.
During the financial year, the Company has issued the following shares:
Date of Issue
6 March 2009
1 June 2009
No. of Shares Issued
20,000
250,000
Issue Price
RM2.70
RM4.00
Purposes
Increase working capital
Part finance the acquisition of a subsidiary
The new shares issued rank pari passu in respect of the distribution of dividends and repayment of
capital with the existing shares.
The Company did not issue any debentures during the financial year.
If the Company did not issue any new shares or debentures:
The Company did not issue any new shares or debentures during the financial year.
169(11), (12)
SHARE OPTIONS
No options have been granted by the Company to any parties during the financial year to take up
unissued shares of the Company.
No shares have been issued during the financial year by virtue of the exercise of any option to take
up unissued shares of the Company. At the end of the financial year, there were no unissued
shares of the Company under options.
169(6)(a)
DIRECTORS
The directors who held office since the date of the last report are:
Ser L. T.
Lian K. K.
Mohd. bin R. Z.
Gi J. Q.
Ran H. P.
Hija bin B. T.
Yan D. V.
Wen M. X.
The L. P. (Appointed on 1 July 2009)
2
PERS Ref.
1.46(a)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
REPORT OF THE DIRECTORS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
CA Ref.
169(6)(f)
DIRECTORS’ BENEFITS
During and at the end of the financial year, no arrangements subsisted to which the Company or
its subsidiaries is a party, with the object or objects of enabling directors of the Company to acquire
benefits by means of the acquisition of shares in, or debentures of, the Company or any other body
corporate.
169(8)
Since the end of the previous financial year, no director has received or become entitled to receive a
benefit (other than a benefit included in the aggregate amount of emoluments received or due and
receivable by the directors shown in the financial statements or the fixed salary of a full-time
employee of the Company) by reason of a contract made by the Company or a related corporation
with the director or with a firm of which the director is a member, or with a company in which the
director has a substantial financial interest.
169(6)(g)
DIRECTORS’ INTERESTS
According to the register of directors’ shareholding, the interests of directors in office at the end of
the financial year in the ordinary shares of the Company and its related corporations during the
financial year are as follows:
No. of Ordinary Shares of RM1 each
At 1.1.2009
At
(or date of
Bought
Sold
31.12.2009
appointment)
Direct Interest in holding company –
Be Competent Sdn. Bhd.
Ordinary Shares
Ser L. T.
1,000,000
1,000,000
Lian K. K.
600,000
600,000
Mohd. bin R. Z.
400,000
400,000
Gi J. Q.
200,000
200,000
Direct Interest in a subsidiary –
AXP Property Sdn. Bhd.
Ordinary Shares
The L. P.
Deemed Interest in the Company
Ordinary Shares
Ser L. T.
Lian K. K.
Mohd. bin R. Z.
The L. P.
20,000
-
(20,000)
-
7,000,000
7,000,000
7,000,000
-
500,000
500,000
500,000
250,000
-
7,500,000
7,500,000
7,500,000
250,000
3
PERS Ref.
1.46(a)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
REPORT OF THE DIRECTORS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
CA Ref.
No. of Ordinary Shares of RM1 each
At 1.1.2009
(or date of
appointment)
Direct Interest in the Company
Ordinary Shares
Ser L. T.
Lian K. K.
Mohd. bin R. Z.
Ran H. P.
Hija bin B. T.
The L. P.
4,145
3,273
40,000
2,041
50,010
216,000
Bought
Sold
359
458
4,000
1,076
6,781
100,000
(2,000)
(246)
-
At
31.12.2009
4,504
3,731
42,000
2,871
56,791
316,000
None of the other directors in office at the end of the financial year held any shares in the
Company or in any related corporations during the financial year ended 31 December 2009.
OTHER STATUTORY INFORMATION
Before the income statements and the balance sheets of the Group and the Company were made
out, the directors took reasonable steps:
169(6)(i)
(a)
to ascertain that proper action had been taken in relation to the writing-off of bad debts and
the making of allowance for doubtful debts, and have satisfied themselves that all known
bad debts had been written-off and that adequate allowance had been made for doubtful
debts; and
169(6)(k)
(b)
to ensure that any current assets which were unlikely to be realised at their book values in
the ordinary course of business have been written down to their estimated realisable values.
As of the date of this report, the directors are not aware of any circumstances:
169(6)(j)
(a)
which would render the amount written off for bad debts or the amount of the allowance for
doubtful debts inadequate to any substantial extent in the financial statements of the Group
and the Company; or
169(6)(l)(i)
(b)
which would render the values attributed to current assets in the financial statements of the
Group and the Company misleading; or
169(6)(l)(ii)
(c)
which have arisen which render adherence to the existing method of valuation of assets or
liabilities of the Group and the Company misleading or inappropriate; or
169(6)(o)
(d)
not otherwise dealt with in this report or financial statements which would render any
amount stated in the financial statements of the Group and the Company misleading.
4
PERS Ref.
1.46(a)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
REPORT OF THE DIRECTORS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
CA Ref.
169(6)(m)
As of the date of this report, there does not exist:
(a)
any charge on the assets of the Group and the Company which has arisen since the end of
the financial year and secures the liability of any other person; or
(b)
any contingent liability of the Group and the Company which has arisen since the end of the
financial year.
169(6)(n)
No contingent or other liability has become enforceable, or is likely to become enforceable within
the period of twelve months after the end of the financial year which, in the opinion of the
directors, will or may substantially affect the ability of the Group and the Company to meet its
obligations as and when they fall due.
169(6)(q)
In the opinion of the directors, no item, transaction or event of a material and unusual nature has
arisen in the interval between the end of the financial year and the date of this report which is
likely to affect substantially the results of operations of the Group and the Company for the
succeeding financial year.
169(10)
HOLDING COMPANY
The Company is a subsidiary of Be Competent Sdn. Bhd., a company incorporated in Malaysia,
which is also regarded by the directors as the ultimate holding company.
AUDITORS
The retiring auditors, Messrs. Auditors & Co., have indicated their willingness to be re-appointed
in accordance with Section 172(2) of the Companies Act, 1965.
Signed on behalf of the Board
in accordance with a resolution of the directors,
Ser L T
Ser L. T.
Lian K K
Lian K. K.
Kuala Lumpur
31 January 2010
5
PERS Ref.
1.46(a)
CA169(15)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
STATEMENT BY THE DIRECTORS
Pursuant to Section 169 (15) of the Companies Act, 1965
The directors of Model Group Sdn. Bhd. state that, in their opinion, the financial statements set
out on page 9 to 62 are drawn up in accordance with the provisions of the Companies Act, 1965
and the MASB Applicable Approved Accounting Standards for Private Entities in Malaysia so as to
give a true and fair view of the state of affairs of the Group and the Company as at 31 December
2009 and of the results of their businesses and the cash flows of the Group and the Company for
the financial year ended on that date.
Signed on behalf of the Board
in accordance with a resolution of the directors,
Ser L T
Ser L. T.
Lian K K
Lian K. K.
Kuala Lumpur
31 January 2010
CA169(16)
STATUTORY DECLARATION
Pursuant to Section 169 (16) of the Companies Act, 1965
I, Gi J. Q., the director primarily responsible for the financial management of Model Group Sdn.
Bhd., do solemnly and sincerely declare that the financial statements set out on page 9 to 62 are, in
my opinion, correct and I make this solemn declaration conscientiously believing the same to be
true, and by virtue of the provisions of the Statutory Declarations Act, 1960.
Subscribed and solemnly declared by
the above named Gi J. Q. at
)
)
KUALA LUMPUR on 31 January 2010
)
Gi J Q
Before me,
Commissioner for Oaths
__________________________________
COMMISSIONER FOR OATHS
6
RPG 4
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
MODEL GROUP SDN. BHD. (Company No.: 12345678-A)
(Incorporated in Malaysia)
CA Ref.
Report on the Financial Statements
We have audited the financial statements of Model Group Sdn. Bhd., which comprise the balance
sheets as at 31 December 2009 of the Group and the Company, and the income statements,
statements of changes in equity and cash flow statements of the Group and the Company for the
financial year then ended, and a summary of significant accounting policies and other explanatory
notes, as set out on pages 9 to 62.
Directors’ Responsibility for the Financial Statements
The directors of the Company are responsible for the preparation and fair presentation of these
financial statements in accordance with Private Entity Reporting Standards and the Companies
Act, 1965 in Malaysia. This responsibility includes: designing, implementing and maintaining
internal control relevant to the preparation and fair presentation of financial statements that are
free from material misstatement, whether due to fraud or error; selecting and applying appropriate
accounting policies; and making accounting estimates that are reasonable in the circumstances.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with approved standards on auditing in Malaysia. Those
standards require that we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on our judgment,
including the assessment of risks of material misstatement of the financial statements, whether due
to fraud or error. In making those risk assessments, we consider internal control relevant to the
Company’s preparation and fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of accounting estimates
made by the directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
Opinion
174(2)(a)
In our opinion, the financial statements have been properly drawn up in accordance with Private
Entity Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair
view of the financial position of the Group and the Company as at 31 December 2009 and of their
financial performance and cash flows for the financial year then ended.
7
CA Ref.
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
MODEL GROUP SDN. BHD. (Company No.: 12345678-A) – Cont’d
(Incorporated in Malaysia)
Report on Other Legal and Regulatory Requirements
In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the
following:
174(2)(b)
(a)
In our opinion, the accounting and other records and the registers required by the Act to
be kept by the Company and its subsidiaries have been properly kept in accordance with
the provisions of the Act.
174(2)(c)(ii)
(b)
We have considered the financial statements and the auditors’ reports of all the
subsidiaries of which we have not acted as auditors, which are indicated in Note 9 to the
Financial Statements.
174(2)(c)(iii)
(c)
We are satisfied that the financial statements of the subsidiaries that have been
consolidated with the Company’s financial statements are in form and content appropriate
and proper for the purposes of the preparation of the financial statements of the Group
and we have received satisfactory information and explanations required by us for those
purposes.
174(2)(c)(iv)
(d)
The audit reports on the financial statements of the subsidiaries did not contain any
qualification or any adverse comment made under Section 174(3) of the Act.
Other Matters
This report is made solely to the members of the Company, as a body, in accordance with Section
174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume
responsibility to any other person for the content of this report.
Auditors & Co.
Auditors & Co.
(AF – 99999)
Chartered Accountants
Hu G E
Hu G. E.
No. 9999/88/10 (J)
Partner of the Firm
Kuala Lumpur
31 January 2010
8
PERS Ref.
1.46(a)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
1.8(a)
BALANCE SHEETS
1.46(b),(c)
AS AT 31 DECEMBER 2009
THE GROUP
Note
1.46(d),(e)
THE COMPANY
2009
2008
2009
2008
RM
RM
RM
RM
1.53
NON CURRENT ASSETS
1.66(a)
Property, plant and equipment
4
9,716,982
6,538,764
3,267
4,070
1.67
Investment property
5
6,305,303
4,506,445
-
-
32.51
Land held for development
6
965,719
102,622
-
-
1.66(b)
Goodwill
7
4,790,350
3,828,841
-
-
1.66(b)
Other intangible assets
8
4,163,426
4,222,640
1.66(d)
Subsidiaries
9
1.66(d),12.38
Investment in associates
10
1,484,315
1,240,119
1.66(d)
Investment in jointly-controlled
entities
11
1,205,535
1.66(d)
Other investments
12
1.66(i)
Deferred tax assets
13
1.53
CURRENT ASSETS
32.51(c)
Property development costs
14
-
-
-
-
12,319,649
11,335,974
23,093
23,093
650,153
-
-
437,765
610,291
19,370
17,952
10,985
31,164
-
-
29,080,380
21,731,039
1,191,144
137,830
12,365,379
-
11,381,089
-
1.66(e)
Inventories
15
393,798
770,136
1.66(f)
Trade and other receivables
16
1,036,917
1,271,984
7.43(a)
Gross amount due from customers
17
101,398
108,183
32.50(d)(i)
Accrued billings
31,008
65,374
-
-
1.66(d)
Other investments
12
96,802
155,781
5,068
52,090
3,471,675
-
5,415,978
-
1.66(g)
Fixed deposits with licensed banks
18
206,625
271,791
-
-
1.66(g)
Cash and bank balances
19
97,305
215,132
128
214
3,154,997
2,996,211
3,476,871
5,468,282
340,478
329,113
1.53
CURRENT LIABILITIES
1.66(h)
Trade and other payables
20
1,880,738
1,113,302
7.43(b)
Gross amount due to customers
21
3,211
1,453
-
-
32.50(d)(ii)
Progress billings
228,605
74,075
-
-
1.66(i)
Current tax liabilities
34,598
68,272
-
-
1.66(k)
Hire purchase and finance lease
payables
56,966
53,476
-
-
22
1.66(g)
Bank overdrafts
23
280,316
324,225
36,068
44,396
1.66(k)
Other bank borrowings
23
2,397,013
2,095,412
195,501
152,939
1.66(j)
Provisions
24
163,358
165,268
5,044,805
3,895,483
NET CURRENT ASSETS / (LIABILITIES)
(1,889,808)
27,190,572
(899,272)
20,831,767
-
-
572,047
526,448
2,904,824
4,941,834
15,270,203
16,322,923
9
PERS Ref.
1.46(a)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
1.8(a)
BALANCE SHEETS - Cont'd
1.46(b),(c)
AS AT 31 DECEMBER 2009
THE GROUP
1.46(d),(e)
THE COMPANY
2009
2008
2009
2008
Note
RM
RM
RM
RM
FINANCED BY:
1.66(m)
CAPITAL AND RESERVES
1.66(m)
Share capital
25
11,320,200
11,050,200
11,320,200
11,050,200
1.66(m)
Share premium
26
1,242,500
458,500
1,242,500
458,500
1.66(m)
Revaluation reserves
27
642,254
557,002
-
-
1.66(m)
Translation reserves
28
943,706
685,440
-
-
1.66(m)
Retained profits
29
8,969,699
4,357,983
2,707,503
4,772,689
23,118,359
17,109,125
15,270,203
16,281,389
2,461,253
2,304,446
-
-
Shareholders' Equity
1.66(l)
Minority interest
1.53
NON CURRENT LIABILITIES
1.66(i)
13
1,174,856
929,279
-
-
1.66(k)
Deferred tax liabilities
Hire purchase and finance lease
payables
22
91,622
105,812
-
-
1.66(k)
Other bank borrowings
23
247,290
265,977
-
41,534
1.66(j)
Provisions
24
30,449
44,888
-
-
1.67
Retirement benefit obligation
30
66,743
72,240
-
-
1,610,960
1,418,196
-
41,534
27,190,572
20,831,767
15,270,203
16,322,923
10
PERS Ref.
1.46(a)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
1.8(b)
INCOME STATEMENTS - Expenses Classified by Function
1.46(b),(c)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
THE GROUP
1.46(d),(e)
Note
31
THE COMPANY
2009
2008
2009
2008
RM
RM
RM
RM
1.75(a)
Revenue
23,743,683
19,326,112
1.82
Cost of sales
(12,966,796)
(11,656,606)
1.75
Gross profit
10,776,887
7,669,506
381,809
291,722
1.82
Other income
352,383
345,597
107,585
117,737
1.82
Distribution costs
1.82
Administrative expenses
1.82
Other expenses
1.75(b)
Profit from operations
1.75(c)
Finance costs
(234,750)
1.75(d),12.39
Share of profit of associates
275,354
Share of profit of jointly-controlled
entities
-
-
(618,208)
(663,922)
(1,014,755)
(265,406)
(251,828)
(764,448)
(625,671)
(13,761)
(2,060)
-
210,227
155,571
(256,549)
(30,504)
(24,262)
89,460
-
-
631,116
499,541
-
-
8,278,297
6,043,207
(1,154,309)
(1,149,001)
- share of tax expense in associates
(49,654)
- share of tax expense in jointlycontrolled entities
Profit before tax
32
1.75(e)
Income tax expense
33
- Company and subsidiaries
Profit after tax
Minority interest
Profit For The Financial Year
5,710,755
-
291,722
(2,140,037)
7,606,577
1.75
1.75(i)
381,809
179,723
131,309
(7,869)
-
(19,681)
-
-
(75,734)
(74,931)
-
-
(1,279,697)
6,998,600
(156,807)
(1,243,613)
4,799,594
(129,530)
(7,869)
171,854
-
131,309
-
6,841,793
4,670,064
171,854
131,309
11
PERS Ref.
1.46(a)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
1.8(b)
INCOME STATEMENTS - Expenses Classified by Nature
1.46(b),(c)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
THE GROUP
1.46(d),(e)
Note
1.75(a)
Revenue
1.80
1.80
31
THE COMPANY
2009
2008
2009
2008
RM
RM
RM
RM
23,743,683
19,326,112
381,809
291,722
Other income
336,627
345,597
107,585
117,737
Changes in inventories of finished
goods and work in progress
268,393
(493,001)
-
-
Raw materials and consumable used
(46,289)
(68,739)
-
-
1.80
7.40(b)
Contract costs recognised
(1,352,588)
(1,166,701)
-
-
32.50(b)
Property development costs recognised
(8,010,989)
(5,145,983)
-
-
1.80
1.80,14.15(c)
Staff costs
Depreciation expense
(490,010)
(1,228,514)
(342,001)
(876,403)
(58,975)
(469)
(38,305)
(492)
1.80
Amortisation charges
(1,832,375)
(1,503,955)
-
-
(40,007)
(16,187)
-
-
15,756
-
-
-
Impairment losses recognised
Impairment losses reversed
1.80
Other expenses
1.75(b)
Profit from operations
1.75(c)
Finance costs
1.75(d),12.39
(4,347,984)
(219,723)
(215,091)
7,606,577
5,710,755
210,227
155,571
(234,750)
(256,549)
(30,504)
(24,262)
Share of profit of associates
275,354
89,460
-
-
Share of profit of jointly-controlled
entities
631,116
499,541
-
-
8,278,297
6,043,207
(1,154,309)
(1,149,001)
- share of tax expense in associates
(49,654)
- share of tax expense in jointlycontrolled entities
1.75
Profit before tax
32
1.75(e)
Income tax expense
33
- Company and subsidiaries
Profit after tax
Minority interest
1.75(i)
(3,757,110)
Profit For The Financial Year
179,723
131,309
(7,869)
-
(19,681)
-
-
(75,734)
(74,931)
-
-
(1,279,697)
6,998,600
(156,807)
(1,243,613)
4,799,594
(129,530)
(7,869)
171,854
-
131,309
-
6,841,793
4,670,064
171,854
131,309
12
PERS Ref.
1.46(a)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
1.8(c)
STATEMENTS OF CHANGES IN EQUITY
1.46(b),(c)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
1.86(e),(f)
1.46(d),(e)
THE GROUP
Note
Balance at 1 January 2008
Share
Capital
Share
Premium
Revaluation
Reserves
Translation
Reserves
Retained
Profits
Total
RM
RM
RM
RM
RM
RM
11,045,200
1.86(b)
Revaluation of landed property
-
450,000
-
553,718
3,284
454,049
-
-
3,284
231,391
1.86(b)
Exchange differences on translation of foreign entities
-
-
-
Profit for the financial year
-
-
-
-
4,670,064
4,670,064
1.86(d)
1.86(d)
Dividends
Issue of shares
5,000
8,500
-
-
(2,209,040)
-
(2,209,040)
13,500
11,050,200
458,500
4,357,983
17,109,125
Balance at 31 December 2008
557,002
1.86(b)
Revaluation of landed property
-
-
92,215
1.86(b)
1.86(a)
Exchange differences on translation of foreign entities
Profit for the financial year
-
-
-
1.86(d)
Dividends
1.86(d)
Issue of shares
Transfer to retained profits on disposal
Balance at 31 December 2009
34
25 & 26
270,000
11,320,200
784,000
1,242,500
685,440
258,266
-
-
14,399,926
1.86(a)
34
25 & 26
231,391
1,896,959
6,841,793
258,266
6,841,793
(2,237,040)
(2,237,040)
-
-
-
-
-
(6,963)
-
6,963
642,254
943,706
92,215
8,969,699
1,054,000
23,118,359
13
PERS Ref.
1.46(a)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
1.8(c)
STATEMENTS OF CHANGES IN EQUITY - Cont'd
1.46(b),(c)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
1.86(e),(f)
1.46(d),(e)
THE COMPANY
Note
Balance at 1 January 2008
1.86(a)
Profit for the financial year
1.86(d)
Dividends
1.86(d)
Issue of shares
Profit for the financial year
1.86(d)
Dividends
1.86(d)
Issue of shares
Balance at 31 December 2009
Share
Premium
Retained
Profits
Total
RM
RM
RM
RM
11,045,200
34
25 & 26
Balance at 31 December 2008
1.86(a)
Share
Capital
34
25 & 26
450,000
-
-
-
-
5,000
8,500
11,050,200
458,500
-
-
-
-
270,000
784,000
11,320,200
1,242,500
6,850,420
18,345,620
131,309
131,309
(2,209,040)
-
(2,209,040)
13,500
4,772,689
16,281,389
171,854
171,854
(2,237,040)
2,707,503
(2,237,040)
1,054,000
15,270,203
14
PERS Ref.
1.46(a)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
1.8(d)
CASH FLOW STATEMENTS
1.46(b),(c)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
THE GROUP
1.46(d),(e)
Note
5.10, 5.18(b)
CASH FLOWS FROM OPERATING ACTIVITIES
5.18(b)
Profit before tax
5.20(b),(c)
Adjustments for:
THE COMPANY
2009
2008
2009
2008
RM
RM
RM
RM
179,723
131,309
8,278,297
6,043,207
9,438
13,578
-
-
Amortisation charges
1,832,375
1,503,955
-
-
Bad debts written off
2,512
1,081
-
-
37,693
31,270
-
-
1,228,514
876,403
469
492
-
-
Allowance for doubtful debts
Defined benefits plan expense
Depreciation of property, plant and equipment
Dividend income
(1,718)
(2,105)
Gain on disposal of investment property
(2,659)
(173)
Gain on disposal of land held for development
(14)
-
-
-
-
-
Gain on disposal of other investments
(64,242)
(15,914)
(24,474)
5,011
(Gain)/Loss on disposal of subsidiary
(1,459)
-
293,051
-
(Gain)/Loss on disposal of property, plant and equipment
Impairment losses
Interest expense
Interest income
Inventories written down to net realisable value
(760)
(152)
28
40,007
16,187
-
-
234,750
256,549
30,504
24,262
-
-
45,303
-
-
-
-
-
(657)
31,250
Provision for legal costs
347
Provision for warranties
113,718
Reversal of allowance for doubtful debts
(1,088)
(348)
(718)
91,634
(732)
-
-
-
-
Reversal of impairment losses
(15,756)
-
-
-
Reversal of inventories written down
(14,694)
(21,600)
-
-
Reversal of provision for warranties
(72,911)
(31,695)
-
-
Share of profit of associates
(275,354)
(89,460)
-
-
Share of profit of jointly-controlled entities
(631,116)
(499,541)
-
-
90,459
79,948
-
-
10,817,672
8,296,089
Unrealised loss on foreign exchange
Operating profit before changes in working capital
479,121
161,102
5.20(a)
Decrease/(increase) in property development costs
347,396
(302,533)
-
-
5.20(a)
Decrease in bank balances held under H.D.A.
119,905
23,019
-
-
Decrease/(increase) in inventories
811,629
(130,215)
5.20(a)
Decrease in trade and other receivables
83,436
179,842
746,796
(504,553)
Increase/(decrease) in trade and other payables
Cash generated from operations
Contributions to defined benefits plan
12,926,834
(43,190)
7,561,649
(41,540)
1,944,303
11,365
2,434,789
2,056,317
(69,504)
2,147,915
-
-
5.35
Income taxes paid
(969,178)
(765,940)
(7,869)
-
5.31
Interest paid
(235,464)
(256,917)
(30,504)
(24,262)
-
-
-
-
Interest received
Utilisation of provisions
Net cash from operating activities
657
(57,503)
11,622,156
718
(60,078)
6,437,892
2,396,416
2,123,653
15
PERS Ref.
1.46(a)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
1.8(d)
CASH FLOW STATEMENTS - Cont'd
1.46(b),(c)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
THE GROUP
1.46(d),(e)
Note
5.10, 5.16
CASH FLOWS FROM INVESTING ACTIVITIES
5.39
Acquisition of subsidiary, net of cash acquired
5.39
Disposal of subsidiary, net of cash disposed off
Acquisition of land held for development
Advance to associates
5.31
36
Dividend income
Proceeds from disposal of investment property
(1,299,748)
(115,822)
-
(18,496)
(50,782)
423,004
2,105
(642)
-
-
-
-
-
4,000
-
-
-
-
-
633,737
473,561
180,078
37,842
18,739
31,450
1,329
586
(513)
(1,000,000)
(45,089)
-
(1,501,746)
-
Net cash used in investing activities
-
-
(1,380,954)
37
-
223,274
Purchases of investment property
Purchases of property, plant and equipment
-
(500,000)
Purchases of other intangible assets, net of grant
Purchases of other investments
-
(337,990)
(632,780)
(110,000)
(135,712)
(3,708,324)
(594,536)
(677)
(1,088)
(6,835,445)
(2,430,281)
(205,996)
(98,885)
(2,237,040)
(2,209,040)
(2,237,040)
(2,209,040)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid
Issuance of shares
Proceeds from other short term borrowings
Proceeds from term loans
Repayments of hire purchase and finance lease
5.23
RM
405
Proceeds from disposal of other investments
5.23
2008
RM
48,325
Proceeds from disposal of property, plant and equipment
5.31
2009
RM
(325)
Proceeds from disposal of land held for development
5.10, 5.17
2008
RM
1,718
Interest paid
5.43
2009
(215,536)
35
THE COMPANY
54,000
13,500
54,000
13,500
10,921,954
9,950,329
4,950,965
3,950,491
495,043
594,032
45,909
32,012
(409,908)
(506,969)
(11,418,268)
(10,469,787)
(4,879,198)
(3,753,950)
Repayments of term loans
(2,211,628)
(1,329,049)
(116,814)
(45,059)
Net cash used in financing activities
(4,805,847)
(3,956,984)
(2,182,178)
(2,012,046)
Repayments of other short term borrowings
-
-
Net (decrease)/increase in cash and cash equivalents
(19,136)
50,627
8,242
12,722
Cash and cash equivalents at beginning of financial year
(17,323)
(67,950)
(44,182)
(56,904)
(36,459)
(17,323)
(35,940)
(44,182)
Cash and cash equivalents at end of financial year
38
16
PERS Ref.
1.46(a)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
1.8(e)
1.46(b),(c)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
1.102(a)
The Company is a private limited company incorporated and domiciled in Malaysia. The
registered office and principal place of business is located at 83A, Jalan Emas 1, Taman Sri Skudai,
81300 Johor Bahru, Johor.
1.102(b)
The principal activities of the Company are that of investment holding and provision of
management services to its subsidiaries. The principal activities of the subsidiaries are described in
Note 9. There have been no significant changes in the nature of the activities during the financial
year.
1.102(c)
The Company is a subsidiary of Be Competent Sdn. Bhd., a company incorporated in Malaysia,
which is also regarded by the directors as the ultimate holding company of the Company.
1.102(d)
The number of employees of the Group and the Company as at 31 December 2009 are 35 and 3
(2008: 30 and 2) respectively.
1.46(d)
The financial statements of the Group and the Company are reported in Ringgit Malaysia (RM).
1.91(a)
The financial statements have been prepared in accordance with the MASB Applicable Approved
Accounting Standards for Private Entities in Malaysia and the provisions of the Companies Act,
1965.
1.97(a)
The financial statements have been prepared on the historical cost basis, except for the revaluation
of certain assets. The principal accounting policies adopted are set out below:
1. GENERAL INFORMATION
2. BASIS OF PREPARATION
3. SIGNIFICANT ACCOUNTING POLICIES
11.11
11.6
11.44,
11.47(c)
11.26
Consolidation
The consolidated financial statements incorporate the financial statements of the Company and its
subsidiaries. Subsidiaries are entities controlled by the Company. Control exists when the
Company has the power to govern the financial and operating policies of an entity so as to obtain
benefits from its activities.
Investments in subsidiaries are stated in the Company’s financial statements at cost, less
impairment losses, if any.
The results of subsidiaries acquired or disposed of during the financial year are included in the
consolidated financial statements from the acquisition date or up to the effective date of disposal,
where appropriate. Consolidated financial statements are prepared using uniform accounting
policies for like transactions and other events in similar circumstances.
11.21
All intragroup balances, transactions, income and expenses are eliminated in full on consolidation.
15.78(a)
Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation and accumulated
impairment losses, if any, except for freehold land and buildings.
17
PERS Ref.
1.46(a)
1.8(e)
1.46(b),(c)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
15.78(a)
15.34
Assets stated at valuation
Freehold land and buildings are stated at their revalued amount, being its fair value at the date of
revaluation, less subsequent accumulated depreciation and subsequent impairment losses, if any.
Revaluations are made with sufficient regularity to ensure that the carrying amount does not
differ materially from that which would be determined using fair value at the balance sheet date.
15.43
Any revaluation increase arising from the revaluation is credited to revaluation reserves account,
except when the increase is recognised in the income statements to the extent that it reverses a
revaluation decrease of the same asset previously recognised in income statements. Any
revaluation decrease arising from the revaluation is recognised in income statements, except when
the decrease is debited to the revaluation reserves account to the extent of any credit balance
existing in the revaluation reserves account in respect of that asset. Revaluation surplus is
transferred directly to retained profits when the asset is retired or disposed of.
15.44
15.45
14.15(a),(b)
15.78(b),(c)
Except for freehold land and assets under construction, depreciation is provided on a straight-line
method so as to write off the cost or valuation of the assets over their estimated useful lives, as
follows:
Buildings
Plant and machinery
Motor vehicles
Equipment, furniture and fittings
50 years
10 years
5 years
3 ~ 5 years
15.59
The residual values and the useful lives of assets, if significant, are reviewed at each balance sheet.
15.74
The gain or loss arising from the disposal or retirement of an asset, determined as the difference
between the net disposal proceeds, if any, and the carrying amount of the item, are recognised in
income statements.
Depreciation of an asset begins when it is ready for its intended use.
IAS25
Investment Property
Investment property, principally comprising of property held to earn rentals or for capital
appreciation or both, are held for long term rental yields and are not occupied by the Group.
Investment property is carried at market value determined annually by external independent
valuers.
Any revaluation increase arising from the revaluation is credited to revaluation reserves account,
except when the increase is recognised in the income statements to the extent that it reverses a
revaluation decrease of the same asset previously recognised in income statements. Any
revaluation decrease arising from the revaluation is recognised in income statements, except when
the decrease is debited to the revaluation reserves account to the extent of any credit balance
existing in the revaluation reserves account in respect of that asset. Revaluation surplus is
transferred directly to retained profits when the asset is retired or disposed of.
18
PERS Ref.
1.46(a)
1.8(e)
1.46(b),(c)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
Property Development Activities
Land held for property development is carried at cost less any accumulated impairment losses
and is classified as non-current asset where no development activities are carried out or where
development activities are not expected to be completed within the normal operating cycle.
Property development costs comprise all costs that are directly attributable to development
activities including costs associated with the acquisition of land, costs related directly to a specific
property development activity and costs attributable to the development activities in general and
can be allocated to the project.
32.50(a)
When the development and construction activities have commenced and the financial outcome of
the development activities can be reliably estimated, property development revenue will be
recognised for the development unit sold and determined by reference to the stage of completion
of the development activity at the balance sheet date. Stage of completion is determined based on
the proportion that property development costs incurred for work performed to date bear to the
estimated total property development costs.
When the outcome of a property development activity cannot be estimated reliably, property
development revenue is recognised only to the extent of property development costs incurred that
it is probable will be recoverable and property development costs are recognised as an expense in
the financial year in which they are incurred.
An expected loss on the property development activity is recognised as an expense immediately
(including costs to be incurred over the defects liability period).
Inventories of unsold completed development units are stated at the lower of cost and net
realisable value. Net realisable value represents the estimated selling price less all estimated costs
of completion and costs to be incurred in marketing, selling and distribution.
Goodwill
Goodwill arising on the acquisition of a subsidiary, being the excess of the cost of the business
combination over the Group’s interest in the net fair value of the identifiable assets and liabilities,
is initially measured at cost and recognised as an asset. Goodwill is subsequently measured at
cost less accumulated amortisation and accumulated impairment losses, if any.
Goodwill is amortised using the straight line method over its estimated useful life of 15 years.
On disposal of a subsidiary, the attributable amount of goodwill is included in the determination
of the income statements on disposal.
Goodwill arising on the acquisition of an associate or an equity-accounted jointly controlled entity
is included within the carrying amount of the investment and is assessed for impairment as part of
the investment.
4.30(a)
Other Intangible Assets
Expenditure incurred on research activities is recognised in income statements as and when it is
incurred.
19
PERS Ref.
1.46(a)
1.8(e)
1.46(b),(c)
4.30(b),(c)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
Other intangible assets with finite useful lives are stated at cost less accumulated amortisation and
accumulated impairment losses, if any. Other intangible assets are amortised on a straight-line
method over their estimated useful lives, as follows:
Software development costs
Patents and trademarks
12.3
5 years
10 years
Investments in Associates
An associate is an entity over which the Group has significant influence and that is neither a
subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the
financial and operating policy decisions of the investee but is not control or joint control over
those policies.
Investments in associates are stated in the Company’s financial statements at cost, less impairment
losses, if any.
12.6
12.6
12.22
12.31
16.3
Investments in associates are accounted for in the Group’s consolidated financial statements using
equity method until the date the Group ceases to have significant influence over the associates.
Under the equity method, the investments in associates are initially recognised at cost and the
carrying amount is increased or decreased to recognise the investor’s share of the results of the
investees after the date of acquisition, less impairment losses, if any. Losses of associates in excess
of the Group’s interest in the associates, include any long-term interests that form part of the
Group’s net investment in the associates, are not recognised.
Profits or losses on transactions entered between the Group and the associates are eliminated to
the extent of the Group’s interest in the associates.
Investments in Joint Ventures
A joint venture is a contractual arrangement whereby the Group and other parties undertake an
economic activity that is subject to joint control, where the strategic financial and operating
decisions relating to the activity require the unanimous consent of the parties sharing control.
16.50
Investment in jointly-controlled entities are accounted for in the Group’s consolidated financial
statements using equity method until the date the Group ceases to have joint control.
IAS 25
Other Investments
Other non-current investments are stated at cost less impairment losses, if any. Other current
investments are stated at the lower of cost and net realisable value.
23
Impairment of Assets
At each balance sheet date, the Group and the Company assess whether there is any indication
that an asset may be impaired. If any such indication exists, the recoverable amounts of the assets
are estimated.
When it is not possible to estimate the recoverable amount of an individual asset, the Group and
the Company estimate the recoverable amount of the cash-generating unit to which the asset
belongs.
20
PERS Ref.
1.46(a)
1.8(e)
1.46(b),(c)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
Recoverable amount is the higher of the net selling price and value in use. In assessing value in
use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to
the asset.
If the recoverable amount of an asset (or a cash-generating unit) is less than its carrying amount,
an impairment loss is recognised to reduce the carrying amount to its recoverable amount. An
impairment loss for a cash-generating unit is firstly allocated to reduce the carrying amount of
goodwill allocated to the cash-generating unit, and then, to the other non-current assets of the unit
pro rata on the basis of the carrying amount of each non-current asset in the unit.
An impairment loss is recognised immediately in income statements, unless it reverses a previous
revaluation, in which case it is treated as a revaluation decrease.
An impairment loss recognised in prior financial periods for an asset, other than goodwill, is
reversed if there has been a change in the estimates used to determine the asset’s recoverable
amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does
not exceed the carrying amount that would have been determined, net of depreciation if no
impairment loss had been recognised, and is recognised immediately in income statements, unless
it reverses a previous revaluation, in which case it is treated as a revaluation increase.
6.9
Foreign Currency ~ Foreign Currency Transactions
Transactions in foreign currencies are initially translated at the exchange rate at the dates of the
transactions.
6.11(a)
At the balance sheet date, foreign currency monetary assets and liabilities are translated into
Ringgit Malaysia at the exchange rate ruling at that date. Exchange differences arising on the
settlement or translation of monetary items are recognised in income statements.
6.11(b),(c)
Non-monetary assets and liabilities measured at historical cost in a foreign currency are translated
using exchange rates at the date of the transactions. Non-monetary assets and liabilities measured
at fair value in a foreign currency are translated using exchange rates at the date when the fair
value was determined.
6.17
6.39
6.47
Foreign Currency ~ Net Investment in a Foreign Operation
Exchange differences arising on the monetary items that, in substance, forms part of the
Company’s net investment in a foreign operation are recognised in the Company’s income
statements. In the consolidated financial statements, such exchange differences are reclassified to
equity only if the monetary items are denominated in either the reporting currency of the
Company or the foreign operation. Deferred exchange differences are recognised in income
statements on disposal of the investment.
Foreign Currency ~ Foreign Entity
Assets and liabilities of a foreign entity are translated into Ringgit Malaysia using the exchange
rate ruling at the balance sheet date. Income and expenses are translated using exchange rate
approximates to those ruling at the date of the transactions. All resulting exchange differences are
recognised in equity.
21
PERS Ref.
1.46(a)
1.8(e)
1.46(b),(c)
6.48
2.37(a)
MAS5.38
(b)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
On the disposal of a foreign entity, cumulative deferred exchange differences are recognised in the
consolidated income statements as part of the gain or loss on sale.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost comprises direct
materials, direct labour costs and overheads, where applicable, that have been incurred in
bringing the inventories to their present location and condition. Cost is calculated using the Firstin First-out method. Net realisable value represents the estimated selling price less all estimated
costs of completion and costs to be incurred in marketing, selling and distribution.
Aquaculture inventories are valued at the lower of cost and net realisable value. Aquaculture
inventories are inventories of the identifiable cost units and consist of the aggregate costs of
materials, direct farm labour and production overheads and other costs incurred in nurturing the
species cultured to their saleable condition.
Net realisable value is estimated based on the most reliable evidence available at the time the
estimates are made as to what the inventories are expected to realise upon completion of the cycle.
Receivables
Receivables are measured at anticipated realisable values. Appropriate allowances for estimated
irrecoverable amounts are recognised in income statements.
7.40(c)
7.40(d)
Construction Contract
When the outcome of a construction contract activity can be estimated reliably, contract revenue
and contract costs associated with the construction contract are recognised as revenue and
expenses respectively by reference to the stage of completion of the contract activity at the balance
sheet date. Stage of completion is determined based on the proportion that contract costs incurred
for work performed to date bear to the estimated total contract costs.
7.40(c)
When the outcome of a construction contract cannot be estimated reliably, contract revenue are
recognised only to the extent of contract costs incurred that it is probable will be recoverable and
contract costs are recognised as an expense in the financial year in which they are incurred.
7.40(c)
Contract revenue also includes variations in contract work, claims and incentive payments to the
extent that it is probable that they will result in revenue and they can be measured reliably.
5.36
An expected loss on the construction contract is recognised as an expense immediately.
5.45
Cash and Cash Equivalents
Cash and cash equivalents comprise cash and bank balances, short-term deposits and other shortterm, highly liquid investments that are readily convertible to a known amount of cash with an
insignificant risk of changes in value. For the purpose of the cash flow statements, cash and cash
equivalents are presented net of bank overdrafts.
Payables
Payables are stated at cost which is the consideration to be paid in the future for goods and
services rendered.
22
PERS Ref.
1.46(a)
1.8(e)
1.46(b),(c)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
Interest-Bearing Liabilities
Interest-bearing liabilities are recognised initially at cost, and subsequently measured at amortised
cost with any difference between proceeds and the settlement and redemption value recognised in
income statements over the period of borrowing on an effective interest basis.
10.8
Hire Purchase and Finance Lease Payables
Hire purchase and leases of property, plant and equipment, which are classified as finance lease,
where substantially all the risks and benefits incidental to the ownership of the assets, but not the
legal ownership, are transferred to the Group and the Company.
10.22
Assets under hire purchase and finance lease are depreciated on a straight-line basis over the
shorter of the hire and lease terms or their useful lives. Hire purchase and finance lease interest is
recognised as an expense in income statements over the lease period so as to give a constant
periodic rate of interest on the outstanding liability at the end of each accounting period.
10.28
All other leases are classified as operating lease and the lease rentals are recognised as an expense
in income statements on a straight-line basis over the lease periods.
20.15
Provisions
A provision is recognised when the Group and the Company have a present obligation as a result
of a past event and it is probable that an outflow of resources embodying economic benefits will
be required to settle the obligation. Provisions are recognised based on a reliable estimate of the
amount of the obligation.
Equity
Equity issued by the Company is recognised at the proceeds received, net of direct issue costs.
31.40
Government Grants
Government grants are recognised when there is reasonable assurance that the Group and the
Company will comply with the conditions attaching to them and the grants will be received.
Government grants are recognised as income on a systematic basis over the periods necessary to
match them with the related costs which they are intended to compensate.
Government grants related to assets are presented in the balance sheets by setting up the grant as
deferred income while government grant related to income is presented as a credit in income
statements separately.
31.30
8.36(a)
Alternative presentation format for government grants:
Government grants related to assets are presented in the balance sheets by deducting the grant in
arriving at the carrying amount of the asset, while government grants related to income are
deducted against the related expenses.
Revenue
Revenue from sales of goods is recognised when the significant risks and rewards of ownership
have been transferred to the buyer. Revenue is measured at the fair value of the consideration
received or receivable, net of discounts and taxes applicable to the revenue.
23
PERS Ref.
1.46(a)
1.8(e)
1.46(b),(c)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
Revenue from rendering of services is measured by reference to the stage of completion of the
transaction at the balance sheet date.
Interest income is recognised using the effective interest method, and accrued on a time basis.
Royalty income, licence fee income and property rental income are recognised on an accrual basis
in accordance with the substance of the relevant agreement.
Dividend income is recognised when the shareholder’s rights to receive payment is established.
MAS5.38(a)
29.11
Income of aquaculture products is determined based on the project approach by matching costs
and revenues of each individual production cycle. Revenue is recognised at the point of sale.
Short-term Employment Benefits
Short-term employment benefits, such as wages, salaries and social security contributions, are
recognised as an expense in the financial year in which the associated services are rendered by
employees of the Group and the Company.
29.12
Short-term accumulating compensated absences, such as paid annual leave, are recognised when
the employees render services that increase their entitlement to future compensated absences.
Non-accumulating compensated absences, such as sick and medical leaves, are recognised when
the absences occur.
29.15
The expected cost of accumulating compensated absences is measured as the additional amount
expected to be paid as a result of the unused entitlement that has accumulated at the balance sheet
date.
29.18
Profit-sharing and bonus plans are recognised when the Group and the Company have a present
legal or constructive obligation to make payments as a result of past events and a reliable estimate
of the obligation can be made. A present obligation exists when, and only when the Group and
the Company have no realistic alternative but to make the payments.
29.46
29.125(a)
29.125(a)
Defined Contribution Plan
Contributions to the statutory pension scheme are recognised as an expense in income statements
in the financial year to which they relate.
Defined Benefit Plan
The Group operates a funded Retirement Benefit Plan (the Plan) for its eligible employees.
Contributions to the Plan are made quarterly and are charged to income statements so as to
spread the cost of the Plan over the employees’ working lives in the Group.
The Group’s obligations under the Plan are determined based on triennial actuarial valuations
where the amounts of benefits that the employees have earned in return for their services in the
current and prior financial years are estimated. The present values of the Plan’s obligations and
the related current service and any past service cost are determined using the Projected Unit
Credit Method.
24
PERS Ref.
1.46(a)
1.8(e)
1.46(b),(c)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
29.93
Actuarial gains and losses are recognised as income or expense if the net cumulative unrecognised
actuarial gains and losses at the end of the previous reporting period exceed 10% of the greater of
the present value of the obligation and the fair value of Plan assets at the balance sheet date.
29.97
Past service cost is recognised as an expense on a straight-line basis over the average period until
the benefits become vested. To the extent that the benefits are already vested immediately
following the introduction of, or changes to, the Plan, the past service cost is recognised
immediately.
29.55
The Plan recognised in the balance sheets is the net total of the present value of the Plan adjusted
for unrecognised actuarial gains or losses, unrecognised past service cost, minus the fair value of
Plan assets. Any asset resulting from the computation is stated at the lower of the amount
determined or the total of any cumulative unrecognised actuarial losses and past service cost, and
the present value of available refunds and reductions in future contribution to the Plan.
29.114
Gains or losses on the curtailment or settlement of the Plan are recognised when the curtailment or
settlement occurs.
29.138
29.145
27.29(a)
Termination Benefits
Termination benefits are recognised when the Group and the Company are demonstrably
committed to terminate the employment of the employees before the normal retirement date or
provide termination benefits as a result of an offer made for voluntary redundancy.
Termination benefits in relation to the offer made for voluntary redundancy is measured based on
the number of employees expected to accept the offer.
Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of a
qualifying asset are capitalised as part of the cost of the asset when the expenditures for the asset
and borrowing costs are being incurred, and activities that are necessary to prepare the asset for
its intended use or sale are in progress. Capitalisation of borrowing costs is suspended during any
extended periods in which active development is interrupted and ceased when substantially all
the activities necessary to prepare the qualifying asset for its intended use or sale are complete.
All other borrowing costs are recognised as an expense in income statements in the financial year
in which they are incurred.
25
Income Tax
Income tax comprises of current tax and deferred tax.
Current tax and deferred tax are charged or credited to equity if the tax relates to items that are
credited or charged directly to equity.
Current tax liabilities are measured based on the amounts expected to be paid, using the tax rates
that have been enacted or substantially enacted by the balance sheet date.
25
PERS Ref.
1.46(a)
1.8(e)
1.46(b),(c)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
Deferred tax is provided in full, using the liability method, on temporary differences which are the
differences between the carrying amount in the financial statements and the corresponding tax
base of an asset or liability at the balance sheet date.
Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets
are recognised for all deductible temporary differences to the extent that it is probable that taxable
profit will be available against which the deductible temporary differences can be utilised.
Deferred tax liabilities and assets are not recognised if the temporary differences arise from
goodwill and for initial recognition of assets or liabilities that affect neither accounting profit nor
taxable profit. Deferred tax liabilities and assets reflect the tax consequences that would follow
from the manner in which the entity expects to recover or settle the carrying amounts of its assets
and liabilities and are measured using the tax rates that have been enacted or substantially
enacted by the balance sheet date.
The carrying amount of the deferred tax assets are reviewed at each balance sheet date, and the
carrying amount is reduced to the extent that it is no longer probable that sufficient taxable profit
will be available to allow all or part of the asset to be utilised. The reduction is reversed to the
extent that it becomes probable that sufficient taxable profit will be available.
26
PERS Ref.
1.46(a)
1.8(e)
1.46(b),(c)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
4. PROPERTY, PLANT AND EQUIPMENT
THE GROUP
Freehold
Land#
Buildings #
Plant and
Machinery
Motor
Vehicles
RM
RM
RM
RM
Equipment,
Properties
Furniture and
Under
Fittings
Construction *
RM
RM
Total
RM
Cost / Valuation
15.78(d)
At 1 January 2009
1,429,010
2,549,121
1,546,950
2,303,021
769,504
905,695
9,503,301
15.78(e)(i)
Additions
59,178
2,000,393
238,652
1,594,500
45,960
325,943
4,264,626
15.78(e)(iii)
Acquistion of a subsidiary
65,073
59,605
-
295,950
79,605
-
500,233
15.78(e)(iv)
Revaluation surplus
97
342
-
-
-
439
15.78(e)(ii)
Disposals
15.78(e)(ii)
Disposal of a subsidiary
15.78(e)(ix)
IAS25
IAS25
-
(102)
(650)
(239)
(32,012)
(32,011)
-
(65,014)
(3,215)
(65,913)
(1,324,041)
(932,085)
(76,904)
-
(2,402,158)
Reclassification
-
134,607
-
-
-
(134,607)
-
Transfer from investment properties
Transfer to investment properties
-
543,924
-
-
-
-
(78,954)
543,924
(78,954)
15.78(e)(viii)
Exchange differences on consolidation
123
349
-
65,954
3,201
-
69,627
15.78(d)
At 31 December 2009
1,550,164
5,221,778
461,322
3,295,328
789,355
436,905
1,247,864
1,068,521
211,247
1,018,077
12,336,024
Accumulated depreciation and impairment losses
15.78(d)
At 1 January 2009
-
15.78(e)(v)
Impairment losses recognised
-
-
-
2,964,537
-
-
-
15.78(e)(iv)
Reversal of impairment losses
-
-
2,046
(303)
-
-
-
15.78(e)(ii)
Disposals
-
(303)
(130)
(120)
(20,194)
(26,591)
-
(47,035)
15.78(e)(ii)
Disposal of a subsidiary
15.78(e)(vii)
Depreciation charge
-
(34,978)
(903,048)
(569,403)
(54,921)
-
(1,562,350)
-
176,854
39,985
878,774
132,901
-
15.78(e)(viii)
1,228,514
Exchange differences on consolidation
-
87
-
32,910
636
-
33,633
15.78(d)
At 31 December 2009
-
578,738
386,424
1,390,608
263,272
-
2,619,042
2,046
Carrying Amounts
15.78(d)
At 31 December 2008
1,429,010
2,112,216
299,086
1,234,500
558,257
905,695
6,538,764
15.78(d)
At 31 December 2009
1,550,164
4,643,040
74,898
1,904,720
526,083
1,018,077
9,716,982
15.78(a)
# At 2009 valuation
* Disclosure requirement under MASB 15.79(c)
15.78(e)
Note: Comparative information is not required to be presented
27
PERS Ref.
1.46(a)
1.8(e)
1.46(b),(c)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
Equipment,
Furniture
and Fittings
THE COMPANY
RM
15.78(d)
15.78(e)(i)
15.78(e)(ii)
15.78()
Cost
At 1 January 2009
Additions
Disposals
At 31 December 2009
15.78(d)
15.78(e)(ii)
15.78(e)(vii)
15.78(d)
Accumulated depreciation
At 1 January 2009
Disposals
Depreciation charge
At 31 December 2009
1,281
(122)
469
1,628
15.78(d)
15.78(d)
Carrying amounts
At 31 December 2008
At 31 December 2009
4,070
3,267
15.78(e)
Note: Comparative information is not required to be presented.
23.119
In 2009, the Group carried out a review of the recoverable amount of the Group’s assets located in
United Kingdom following an unexpected change in marketing plan. Based on the assessment, an
impairment loss of RM2,046 (2008: RM Nil) was recognised during the financial year. These assets
are used by the software segment. The recoverable amounts of the assets have been determined
based on their value in use. The discount rate used for the current estimate was 6%. The discount
rate used when the recoverable amount of these assets was previously estimated in 2008 was 5%.
15.82
Freehold land and buildings of the Group were revalued at 31 December 2009 by Messrs. Valuer &
Co., an independent professional valuer, based on the open market values on an existing use basis.
The revaluation surplus of RM439 (2008: RM3,459) has been transferred to revaluation reserves
accounts of the Group.
15.82
Had the freehold land and buildings been carried at historical cost less accumulated depreciation
and accumulated impairment losses, if any, the carrying amount of the freehold land and buildings
of the Group would have been as follows:
5,351
677
(1,133)
4,895
THE GROUP
2009
2008
RM
RM
Freehold land
Buildings
THE COMPANY
2009
2008
RM
RM
1,264,180
3,781,201
1,143,123
1,859,101
-
-
5,045,381
3,002,224
-
-
28
PERS Ref.
1.46(a)
1.8(e)
1.46(b),(c)
15.84
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
If the entity availed itself for the transitional provision when the MASB first adopted IAS 16 PPE:
Freehold land and buildings of the Group and the Company were revalued in 1995 by an
independent professional valuer based on the open market values on an existing use basis. As the
Group and the Company have availed themselves of the transitional provision when the MASB
first adopted IAS 16 Property, Plant and Equipment, the freehold land and buildings are stated on
the basis of their 1995 valuations and do not adopted a policy of revaluation.
15.85
Due to the absence of historical records, the Group and the Company are not able to determine the
carrying amounts of the property, plant and equipment that would have been recognised had the
assets been carried under the cost model.
15.79(a)
10.26(a)
The carrying amounts of the property, plant and equipment under hire purchase and finance lease
of the Group are as follows:
THE GROUP
2009
2008
RM
RM
Plant and machinery
Motor vehicles
15.79(a)
28,594
487,490
92,021
143,932
-
-
516,084
235,953
-
-
The Group has pledged the following property, plant and equipment to licensed banks to secure
banking facilities granted to the Group:
THE GROUP
2009
2008
RM
RM
Freehold land
Buildings
15.83(a)
THE COMPANY
2009
2008
RM
RM
THE COMPANY
2009
2008
RM
RM
49,390
60,302
65,138
87,194
-
-
109,692
152,332
-
-
The entities are encouraged, but not required, to disclose the following information:
The carrying amounts of temporarily idle property, plant and equipment of the Group are as
follows:
THE GROUP
2009
2008
RM
RM
Plant and machinery
Equipment, furniture and fittings
THE COMPANY
2009
2008
RM
RM
10,400
5,400
38,100
6,800
-
-
15,800
44,900
-
-
29
PERS Ref.
1.46(a)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
1.8(e)
1.46(b),(c)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
15.83(b)
The gross carrying amounts of fully depreciated property, plant and equipment of the Group are as
follows:
THE GROUP
2009
2008
RM
RM
Plant and machinery
Equipment, furniture and fittings
15.83(c)
THE COMPANY
2009
2008
RM
RM
29,100
19,000
78,800
21,300
-
-
48,100
100,100
-
-
The carrying amounts of property, plant and equipment of the Group which have been retired from
active use are as follows:
THE GROUP
2009
2008
RM
RM
Plant and machinery
Equipment, furniture and fittings
THE COMPANY
2009
2008
RM
RM
33,000
62,000
64,000
29,000
-
-
95,000
93,000
-
-
15.83(d)
The fair value of property, plant and equipment of the Group, which are measured using cost
model amounting to RM2,256,900, is RM3,360,500.
IAS 25
5. INVESTMENT PROPERTY
THE
GROUP
RM
THE
COMPANY
RM
At 1 January 2008
Additions
Disposals
Exchange gain on consolidation
At 31 December 2008
Additions
Acquisition of a subsidiary
Revaluation surplus
Disposals
Exchange loss on consolidation
Transfer from property, plant and equipment
Transfer to property, plant and equipment
4,464,418
45,089
(3,827)
765
4,506,445
1,000,000
1,217,852
91,798
(45,666)
(156)
78,954
(543,924)
-
At 31 December 2009
6,305,303
-
30
PERS Ref.
1.46(a)
1.8(e)
1.46(b),(c)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
The fair value of the investment property of the Group at 31 December 2009 is determined by a
valuation carried out by Messrs. Valuer & Co., an independent professional valuer, based on the
open market values on an existing use basis. Messrs. Valuer & Co. have relevant recognised
professional qualification and have recent experience in valuing properties in the relevant
locations.
The Group has pledged investment property with carrying amount of RM3,983,000 (2008:
RM1,198,000) to licensed banks to secure banking facilities granted to the Group.
If the entity availed itself for the transitional provision when MASB first adopted IAS 16 PPE:
Investment property of the Group was revalued in 1995 by an independent professional valuer
based on the open market values on an existing use basis. As the Group has availed themselves of
the transitional provision when MASB first adopted IAS 16 Property, Plant and Equipment, the
investment property is stated on the basis of their 1995 valuations and does not adopt a policy of
revaluation.
6. LAND HELD FOR DEVELOPMENT
THE GROUP
2009
2008
RM
RM
32.51(a)
32.51(b)(i)
32.51(b)(i)
32.51(b)(ii)
32.51(b)(iii)
32.51(a)
32.51(a)
32.51(b)(iv)
32.51(b)(iv)
32.51(a)
Cost
At beginning of the financial year
Additions
Acquisition of a subsidiary
Disposals
Transfer to property development costs
At end of the financial year
Accumulated impairment losses
At beginning of the financial year
Impairment losses recognised
Reversal of impairment losses
At end of the financial year
THE COMPANY
2009
2008
RM
RM
117,180
215,536
1,495,060
(391)
(861,666)
965,719
60,327
115,822
(58,969)
117,180
-
-
(14,558)
14,558
-
(14,558)
(14,558)
-
-
965,719
102,622
-
-
Carrying amounts
32.51(a)
At end of the financial year
32.52(b)
Land held for development with carrying amounts of RM657,890 (2008: RM102,622) were pledged
to licensed banks to secure banking facilities granted to the Group.
31
PERS Ref.
1.46(a)
1.8(e)
1.46(b),(c)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
7. GOODWILL
THE GROUP
RM
Cost
At 1 January 2008
Exchange loss on consolidation
At 31 December 2008
Exchange gain on consolidation
Acquisition of a subsidiary
Eliminated on disposal of a subsidiary
At 31 December 2009
6,701,026
(119,218)
6,581,808
205,128
1,397,252
(176,930)
8,007,258
Amortisation
At 1 January 2008
Exchange gain on consolidation
Amortisation charge
At 31 December 2008
Exchange loss on consolidation
Amortisation charge
At 31 December 2009
2,310,308
(28,392)
471,051
2,752,967
34,691
391,289
3,178,947
Impairment losses
At 1 January 2009
Impairment losses recognised
At 31 December 2009
37,961
37,961
Carrying amount
At 31 December 2008
3,828,841
At 31 December 2009
4,790,350
32
PERS Ref.
1.46(a)
1.8(e)
1.46(b),(c)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
8. OTHER INTANGIBLE ASSETS
4.30(e)
THE GROUP
Cost
At 1 January 2008
Acquisition of a subsidiary
Exchange gain on consolidation
Additions
At 31 December 2008
Additions net of government grant
receipt of RM230,000 for software
development costs
Exchange gain on consolidation
Disposals
At 31 December 2009
Software
Development
Costs
RM
Patents and
Trademarks
RM
Total
RM
5,204,374
1,403,020
6,607,394
364,867
159
98,726
463,752
5,569,241
159
1,501,746
7,071,146
1,304,054
7,911,448
76,900
43
540,695
1,380,954
43
8,452,143
1,724,307
986,504
2,710,811
1,387,016
4,097,827
90,274
986
35
46,400
137,695
20
(895)
54,070
190,890
1,814,581
986
35
1,032,904
2,848,506
20
(895)
1,441,086
4,288,717
At 31 December 2008
3,896,583
326,057
4,222,640
At 31 December 2009
3,813,621
349,805
4,163,426
Amortisation and Impairment Losses
At 1 January 2008
Impairment losses recognised
Exchange loss on consolidation
Amortisation charge
At 31 December 2008
Exchange loss on consolidation
Impairment losses reversed
Disposals
Amortisation charge
At 31 December 2009
Carrying amounts
31.40(b)
Government grant related to assets is deducted in arriving at the carrying amount of the assets
During the financial year, a subsidiary obtained a government grant under the Research &
Development Grant Scheme up to a maximum of RM1 million on the approved research and
development expenditures incurred.
31.40(c)
The government grant granted is subject to the fulfilment of the condition that the percentage of the
knowledge workers should attain 20% of the total workforce of the said subsidiary by 30 June 2010.
The subsidiary has, subsequent to the financial year, achieved this condition.
33
PERS Ref.
1.46(a)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
1.8(e)
1.46(b),(c)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
31.25
The reconciliation of the amortisation before and after deduction of related government grant
recognised as income is as follows:
THE GROUP
THE COMPANY
2009
2008
2009
2008
RM
RM
RM
RM
Amortisation charge before deduction of
the grant
Effect of the grant on the amortisation
charge (the approved research and
development project is still on-going)
Amortisation charge for the financial year
1,441,086
1,032,904
-
-
-
-
-
-
1,441,086
1,032,904
-
-
The carrying amount of other intangible assets whose title is restricted is RM290,000 (2008:
RM310,000).
The carrying amount of other intangible assets pledged as securities for liabilities is RM540,000
(2008: RM500,000).
9. SUBSIDIARIES
THE COMPANY
2009
2008
RM
RM
11.32
Investments in subsidiaries
Less: Impairment loss recognised
12,320,305
(656)
11,336,630
(656)
12,319,649
11,335,974
34
PERS Ref.
1.46(a)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
1.8(e)
1.46(b),(c)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
11.47(a)
Details of the Company’s subsidiaries as at 31 December 2009 are as follows:
Name of Subsidiaries
Country of
Incorporation
AXP Holdings Sdn. Bhd.
AE R & D Sdn. Bhd.
AE S & I Sdn. Bhd.
AXP Technical Sdn. Bhd.
AXP Land Sdn. Bhd.
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
AXP Property Sdn. Bhd.
Malaysia
AXP Building Sdn. Bhd.
AXP Aquaculture Sdn.
Bhd.
AE (BVI) Limited *
Malaysia
Malaysia
AE S & I Pte. Ltd. *
AE S & I Limited *
AE S & I (NZ) Limited *
AE S & I (PRC) Co., Ltd. *
AE S & I (UK) Limited *
AE S & I (America) Inc. *
AE S & I (Japan) Inc. *
British Virgin
Island
Republic of
Singapore
Hong Kong SAR
New Zealand
People’s Republic
of China
United Kingdom
United States
Japan
Proportion
of ownership
interest
%
Proportion
of voting
power held
%
Investment holding
Research & development
Marketing of software
Publisher of newsletters
Property investment and
development
Property investment and
development
Construction contractor
Aquaculture products
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Investment holding
100
100
Marketing of software
100
100
Marketing of software
Marketing of software
Marketing of software
100
80
60
100
80
60
Marketing of software
Marketing of software
Marketing of software
90
90
70
90
90
45
Principal activities
CA174(2)
(c)(i)
* The financial statements of these subsidiaries are audited by the associate firms of Auditors &
Co. in the respective countries.
11.47(b)(ii)
Although the Group holds not more than half of the voting power in AE S & I (Japan) Inc., the
Company has the power to cast the majority of votes at meetings of the Board of Directors and the
control of the entity is by the Board. Thus, AE S & I (Japan) Inc. is controlled by the Company and
the financial statements of that company are included in the consolidated financial statements.
11.47(b)(iii)
The Group owns 51% of equity interest in SERP (Asia-Pacific) Pte. Ltd., a company incorporated in
the Republic of Singapore. However, by virtue of an agreement with the other investor, the Group
does not have control nor significant influence over that company as the other investor has the
power to govern the financial and operating policies as well as the power to appoint or remove the
majority of the members of the Board of Directors and the control of the entity is by the Board.
Consequently, the investment is recognised as other investments of the Group.
35
PERS Ref.
1.46(a)
1.8(e)
1.46(b),(c)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
When the Company elects not to prepare consolidated financial statements in accordance with
MASB 11.8, if the Company is a wholly-owned subsidiary of another company, which is also
incorporated in Malaysia, the following disclosure is required:
11.8
The Company does not present consolidated financial statements in accordance with MASB 11.8 as
the Company is a wholly-owned subsidiary of Be Competent Sdn. Bhd., a company incorporated
in Malaysia and produces consolidated financial statements. The consolidated financial statements
of Be Competent Sdn. Bhd., which include the financial statements of the Company, are obtainable
from 83A, Jalan Emas 1, Taman Sri Skudai, 81300 Johor Bahru, Johor.
10. INVESTMENT IN ASSOCIATES
THE GROUP
2009
2008
RM
RM
Cost of investment in:
Unquoted associates
Quoted associate
Share of post-acquisition profit, net of
dividend received
Loan to associates
Market value of quoted associate
12.37(a)
THE COMPANY
2009
2008
RM
RM
350,000
628,900
350,000
628,900
23,093
-
23,093
-
406,214
99,201
180,514
80,705
-
-
1,484,315
1,240,119
23,093
23,093
693,000
642,900
-
-
Details of the Group’s associates as at 31 December 2009 are as follows:
Name of Associates
Country of
Incorporation
AXP (S) Limited *
Republic of Singapore
SERP Sdn. Bhd.
AE (HK) Limited
Malaysia
Hong Kong SAR
AE (NZ) Limited
AE Co., Ltd.
New Zealand
People’s Republic of
China
Principal activities
Investment holding
and software
consultancy services
Marketing of SERP
Investment holding
and software
consultancy services
Dormant
Manufacturer of
computer hardware
Proportion
of ownership
interest
%
35
Proportion
of voting
power held
%
35
25
40
18
40
30
40
30
40
* The share capital of this associate is quoted on Catalist of Stock Exchange of Singapore.
36
PERS Ref.
1.46(a)
1.8(e)
1.46(b),(c)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
Although the Group holds less than 20% of the voting power in SERP Sdn. Bhd., the Group
exercises significant influence by virtue of the Group’s right in participation in the policy-making
processes.
Although the Group holds 25% in SERP Pte. Ltd., a company incorporated in the Republic of
Singapore, the Group does not have significant influence over SERP Pte. Ltd. as the Group has only
one representative on the Board of Directors out of six directors. Consequently, the investment is
recognised as other investments of the Group.
The financial statements of AE Co., Ltd. are made up to 30 September to coincide with the financial
year-end of another investor of AE Co., Ltd., which is incorporated in United States, due to the
statutory requirements in United States. For the purpose of applying the equity method of
accounting, the financial statements of AE Co., Ltd. for the financial year ended 30 September 2009
have been used, and appropriate adjustments have been made for significant transactions between
30 September 2009 and 31 December 2009.
As a result of the borrowings’ terms and conditions, the loan to SERP Sdn. Bhd. of RM47,809 (2008:
RM47,201) is subordinate to the borrowings obtained from an offshore bank.
12.38(a)
The following amounts are the Group’s share of the investments in associates:
THE GROUP
2009
2008
RM
RM
Assets and Liabilities
Total Assets
2,160,986
1,805,703
775,872
646,289
Group’s share of associates’ net assets
1,385,114
1,159,414
Results
Revenue
3,104,983
1,309,042
Profit For The Financial Year
536,820
213,850
Group’s share of associates’ profit for the financial year
225,700
69,779
Total Liabilities
37
PERS Ref.
1.46(a)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
1.8(e)
1.46(b),(c)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
12.39
The Group has discontinued recognition of its share of losses of AE (HK) Limited as the share of
accumulated losses of the associate has exceeded the Group’s interest in that associate. The
unrecognised share of losses of AE (HK) Limited are as follows:
THE GROUP
2009
2008
RM
RM
Group’s unrecognised share of losses:
At beginning of the financial year
Current year
At end of the financial year
11. INVESTMENT IN JOINTLY-CONTROLLED ENTITIES
THE GROUP
2009
2008
RM
RM
Cost of investment in unquoted shares
Share of post-acquisition profit, net of
dividend received
16.60
16.60
775,000
453,000
430,000
345,000
1,228,000
775,000
THE COMPANY
2009
2008
RM
RM
300,000
300,000
-
-
905,535
350,153
-
-
1,205,535
650,153
-
-
Details of significant jointly-controlled entities of the Group are as follows:
Name of Jointly-Controlled Entities
Country of Incorporation
and Residence
Held though subsidiaries
AXP-China Co., Ltd.
AXP-Singapore Pte. Ltd.
People’s Republic of China
Republic of Singapore
Proportion of ownership
interest held by the Group
(%)
2009
2008
50
50
40
40
The following amounts are the Group’s share of the investment in jointly-controlled entities:
THE GROUP
2009
2008
RM
RM
Assets and Liabilities
Non-current assets
Current assets
Group’s Share of Total Assets
895,795
615,202
1,510,997
743,900
126,906
870,806
38
PERS Ref.
1.46(a)
1.8(e)
1.46(b),(c)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
THE GROUP
2009
2008
RM
RM
Non-current liabilities
Current liabilities
Group’s Share of Total Liabilities
Group’s Share of Net Assets
Group’s Share of Results
Revenue
Operating Expenses
Profit Before Tax
Income Tax Expense
Profit After Tax
IAS 25
98,003
207,459
305,462
86,048
134,605
220,653
1,205,535
650,153
2,450,785
(1,819,669)
631,116
(75,734)
1,968,054
(1,468,513)
499,541
(74,931)
555,382
424,610
12. OTHER INVESTMENTS
THE GROUP
2009
2008
RM
RM
Non-current:
Quoted investments at cost:
Shares outside Malaysia
Shares in Malaysia
Unquoted investments at cost:
Shares in Malaysia
Current
Quoted investments at cost:
Shares outside Malaysia
Shares in Malaysia
Market value of quoted investments –
published price
Shares outside Malaysia
Shares in Malaysia
THE COMPANY
2009
2008
RM
RM
74,065
332,940
69,880
454,511
19,370
17,952
30,760
85,900
-
-
437,765
610,291
19,370
17,952
17,796
79,006
45,099
110,682
5,068
52,090
96,802
155,781
5,068
52,090
105,800
466,782
135,768
693,301
31,412
83,210
The market value of quoted investments is based on quoted market prices at the balance sheet date.
39
PERS Ref.
1.46(a)
1.8(e)
1.46(b),(c)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
13. DEFERRED TAX ASSETS / LIABILITIES
25.79(f)
The following are the movements of deferred tax assets and liabilities (before offsetting):
Charge (credit) to
Acquisition
At 1
Income
Exchange
of
THE GROUP
January
Statement
Equity
difference
subsidiary
2009
RM
RM
RM
RM
RM
Deferred tax assets
Provisions
Employees benefits
Unused tax losses
Deferred tax liabilities
Properties
Trade receivables
2008
Deferred tax assets
Provisions
Employees benefits
Unused tax losses
Deferred tax liabilities
Properties
Trade receivables
Disposal
of
subsidiary
RM
At 31
December
RM
58,844
24,890
52,035
135,769
(4,610)
3,641
344
(625)
-
10
10
3,268
3,268
(512)
(512)
54,234
31,287
52,389
137,910
1,024,538
9,346
1,033,884
196,104
(1,452)
194,652
22
22
39,085
25
39,110
71,847
321
72,168
(37,825)
(230)
(38,055)
1,293,771
8,010
1,301,781
53,273
22,100
51,769
127,142
5,571
2,790
286
8,647
-
(20)
(20)
-
-
58,844
24,890
52,035
135,769
724,746
9,226
733,972
325,286
151
325,437
175
175
(25,669)
(31)
(25,700)
-
-
1,024,538
9,346
1,033,884
40
PERS Ref.
1.46(a)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
1.8(e)
1.46(b),(c)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
25.72
Deferred tax assets and liabilities are offset when the Group and the Company have a legally
enforceable right to set off current tax assets against current tax liabilities and deferred tax relate to
income taxes levied by the same taxation authority on the same taxable entity. The amounts of
deferred tax assets and liabilities, after appropriate offsetting, are included in the balance sheet, as
follows:
THE GROUP
2009
2008
RM
RM
Deferred tax assets
Deferred tax liabilities
25.79(e)
10,985
31,164
-
-
1,174,856
929,279
-
-
The following temporary differences have not been recognised:
THE GROUP
2009
2008
RM
RM
Deductible temporary differences
Unused tax losses
25.26, 37
THE COMPANY
2009
2008
RM
RM
THE COMPANY
2009
2008
RM
RM
40,300
23,900
32,200
34,900
-
-
64,200
67,100
-
-
Deferred tax assets are not recognised for the above temporary differences as it is not probable that
future taxable profit will be available against which the deductible temporary differences and
unused tax losses can be utilised by the Group as the future profit streams are unpredictable.
However, the unused tax losses may be carried forward indefinitely.
14. PROPERTY DEVELOPMENT COSTS
THE GROUP
2009
2008
RM
RM
32.50(c)(i)
32.50(c)(iv)
32.50(c)(ii)
32.50(c)(iv)
At beginning of the financial year:
Land
Development costs
Add:
Transfer from land held for
development
Acquisition of subsidiary
Development costs incurred
Less:
Completed properties transferred to
inventories
THE COMPANY
2009
2008
RM
RM
53,856
83,974
137,830
23,010
130,952
153,962
-
-
861,666
987,342
8,645,329
58,969
5,234,942
-
-
(456,237)
(83,126)
-
41
PERS Ref.
1.46(a)
1.8(e)
1.46(b),(c)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
THE GROUP
2009
2008
RM
RM
32.50(c)(iii)
32.50(c)(iii)
32.50(c)(iii)
Costs recognised as expenses in
income statements:
Prior financial years
Current financial year
(2,973,797)
(6,010,989)
(8,984,786)
(80,934)
(5,145,983)
(5,226,917)
-
-
1,191,144
137,830
-
-
32.50(c)(i)
At end of the financial year
32.50(c)(i)
Property development costs at end of the financial year represent:
Land
Development costs
32.52(b)
2.37(b)
440,604
750,540
53,856
83,974
-
-
1,191,144
137,830
-
-
Property development costs with a net carrying amount of RM786,911 (2008: RM137,830) were
pledged to licensed banks to secure banking facilities granted to the Group.
15. INVENTORIES
THE GROUP
2009
2008
RM
RM
32.48
2.37(c)
32.48
2.37(f)
THE COMPANY
2009
2008
RM
RM
At cost:
Raw materials
Work-in-progress
Finished goods
Aquaculture inventories
Building materials
Publications
Unsold completed development units
At net realisable value:
Finished goods
Unsold completed development units
THE COMPANY
2009
2008
RM
RM
33
11,420
57
311,621
323,131
108,682
36,772
457,480
75
10,640
58
33,756
647,463
-
-
70,667
70,667
87,321
35,352
122,673
-
-
393,798
770,136
-
-
Inventories of the Group with a carrying value of RM82,288 (2008: RM69,108) have been pledged to
licensed banks for bank facilities granted to certain subsidiaries.
42
PERS Ref.
1.46(a)
1.8(e)
1.46(b),(c)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
16. TRADE AND OTHER RECEIVABLES
THE GROUP
2009
2008
RM
RM
1.72
1.72
1.72
Trade receivables
Less: Allowance for doubtful debts
Net trade receivables
Other receivables, deposits and
prepayments:
- Other receivables
- Deposits
- Prepayments
THE COMPANY
2009
2008
RM
RM
827,105
(69,392)
757,713
1,071,588
(63,377)
1,008,211
-
-
189,973
38,637
50,594
279,204
158,352
39,194
66,227
263,773
3,534
189
43
3,766
2,424
321
27
2,772
-
-
765,394
2,702,515
3,467,909
593,201
4,820,005
5,413,206
1,036,917
1,271,984
3,471,675
5,415,978
Amounts due from subsidiaries:
- trade nature
- non-trade nature and unsecured
- Less: Allowance for doubtful debts
Included in trade receivables of the Group is RM143,682 (2008: RM284,791) owing by companies in
which certain directors of the Company have interests.
Included in other receivables of the Group is RM12,730 (2008: RM32,905) owing by companies in
which certain directors of the Company have interests. The outstanding amount is unsecured,
interest-free and has no fixed terms of repayments.
7.43
17. GROSS AMOUNT DUE FROM CUSTOMERS
THE GROUP
2009
2008
RM
RM
7.41(a)
7.41(a)
7.41(a)
Aggregate contract costs incurred to date
Add: Attributable profits recognised
Less: Expected losses recognised
Less: Progress billings
7.41(c)
Retentions included in trade receivables
THE COMPANY
2009
2008
RM
RM
2,393,904
703,586
(10,395)
3,087,095
(2,985,697)
1,650,960
461,986
(8,267)
2,104,679
(1,996,496)
-
-
101,398
108,183
-
-
69,294
80,933
-
-
43
PERS Ref.
1.46(a)
1.8(e)
1.46(b),(c)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
18. FIXED DEPOSITS WITH LICENSED BANKS
Fixed deposits amounting to RM3,540 (2008: RM3,540) are pledged to licensed banks for bank
facilities granted to the Group.
19. CASH AND BANK BALANCES
THE GROUP
2009
2008
RM
RM
Cash on hand and at bank
Cash at bank held under Housing
Development Account
THE COMPANY
2009
2008
RM
RM
40,340
38,262
128
214
56,965
176,870
-
-
97,305
215,132
128
214
32.50(e)
Cash at bank held under Housing Development Account are opened and maintained under Section
7A of the Housing Development (Control and Licensing) Act 1966.
132.60(a)
20. TRADE AND OTHER PAYABLES
THE GROUP
2009
2008
RM
RM
1.72
1.72
7.41(b)
1.72
Trade payables
Other payables and accruals:
- Other payables
- Accruals
- Advances received from contract
customers
Amounts due to subsidiaries:
- trade nature
- non-trade nature and unsecured
THE COMPANY
2009
2008
RM
RM
1,396,016
568,165
-
-
218,900
262,611
304,254
239,430
179,936
239
123,902
320
3,211
484,722
1,453
545,137
180,175
124,222
-
-
160,303
160,303
204,891
204,891
1,880,738
1,113,302
340,478
329,113
Included in trade payables of the Group is RM439,792 (RM290,012) owing to companies in which
certain directors of the Company have interests.
Included in other payables of the Group is RM43,905 (RM46,711) owing to companies in which
certain directors of the Company have interests. The outstanding amount is unsecured, interestfree and has no fixed terms of repayments.
44
PERS Ref.
1.46(a)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
1.8(e)
1.46(b),(c)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
7.43
21. GROSS AMOUNT DUE TO CUSTOMERS
THE GROUP
2009
2008
RM
RM
7.41(a)
7.41(a)
7.41(a)
Aggregate contract costs incurred to date
Add: Attributable profits recognised
Less: Expected losses recognised
Less: Progress billings
7.41(c)
Retentions included in trade receivables
THE COMPANY
2009
2008
RM
RM
76,960
8,056
(3,095)
81,921
(78,710)
33,911
5,966
39,877
(38,424)
-
-
3,211
1,453
-
-
7,472
6,279
-
-
22. HIRE PURCHASE AND FINANCE LEASE PAYABLES
THE GROUP
2009
2008
RM
RM
10.26(b)
Minimum lease payments
- not later than 1 year
- later than 1 year and not later than 5
years
- later than 5 years
Future finance charges
Present value of hire purchase and
finance lease payables
10.26(b)
10.26(c)
Present value of hire purchase and
finance lease payables is analysed as
follows:
- not later than 1 year
- later than 1 year and not later than 5
years
- later than 5 years
THE COMPANY
2009
2008
RM
RM
64,326
59,872
-
-
98,467
364
163,157
(14,569)
114,297
2,769
176,938
(17,650)
-
-
148,588
159,288
-
-
56,966
53,476
-
-
91,293
329
91,622
103,502
2,310
105,812
-
-
148,588
159,288
-
-
The Group obtains finance lease and hire purchase facilities to finance certain of its plant and
machinery and motor vehicles. The average remaining lease term is 4 years as at 31 December
2009. Implicit interest rate of the finance lease and hire purchase are fixed at the date of the
agreement, and the amount of lease payments are fixed throughout the lease period. The Group
has the option to purchase the assets at the end of the agreement with minimum purchase
considerations. There is no significant restriction clauses imposed on the finance lease and hire
purchase arrangements.
45
PERS Ref.
1.46(a)
1.8(e)
1.46(b),(c)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
23. BANK OVERDRAFTS AND OTHER BANK BORROWINGS
THE GROUP
2009
2008
RM
RM
BANK OVERDRAFTS
- Secured
- Unsecured
1.73(f)
OTHER BANK BORROWINGS
Non-current Liabilities
Term loans:
- Secured
- Unsecured
Current Liabilities
Secured:
- term loans
- revolving credits
- other short-term trade facilities
Unsecured:
- term loans
- other short-term trade facilities
THE COMPANY
2009
2008
RM
RM
179,756
100,560
221,126
103,099
36,068
-
44,396
-
280,316
324,225
36,068
44,396
247,290
247,290
265,977
265,977
-
41,534
41,534
504,598
1,715,425
12,744
662,922
1,148,796
120,183
40,751
154,750
-
70,122
82,817
-
46,182
118,064
2,397,013
22,755
140,756
2,095,412
195,501
152,939
2,644,303
2,361,389
195,501
194,473
The secured bank overdrafts and other bank borrowings of the Group and the Company are
secured by a legal charge over the Group’s and the Company’s landed properties, fixed and
floating charges over assets of certain subsidiaries and guaranteed by the Company.
The entities are encouraged, but not required, to disclose the following information:
5.50(a)
At the balance sheet date, the Group has undrawn committed credit facilities of RM758,100 (2008:
RM449,700) where all the precedent conditions had been met.
24. PROVISIONS
THE GROUP
Warranties
RM
20.85(a)
20.85(b)
20.85(c)
20.85(d)
20.85(a)
At 1 January 2009
Additions
Utilisations
Reversals
At 31 December 2009
20.85
Note: Comparative information is not required to be presented.
210,156
113,718
(57,503)
(72,911)
193,460
Legal Costs
RM
347
347
Total
RM
210,156
114,065
(57,503)
(72,911)
193,807
46
PERS Ref.
1.46(a)
1.8(e)
1.46(b),(c)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
THE GROUP
2009
2008
RM
RM
Represent:
- Current liability
- Non-current liability
20.86
20.86
1.74(a)
THE COMPANY
2009
2008
RM
RM
163,358
30,449
165,268
44,888
-
-
193,807
210,156
-
-
Warranties
Provision for warranties is made based on the management’s best estimate of the expenditure
required, based on past experience of similar products and services, to be incurred during the
warranty periods.
Legal Costs
During the financial year, a supplier of a subsidiary took legal action against the said subsidiary
seeking damages, including interest costs and legal costs incurred and to be incurred, from the said
subsidiary for the delay in making payments, but the subsidiary disputes liability due to the quality
of the products supplied by the supplier did not meet its requirement. However, its lawyer advises
that it is probable that the subsidiary will be found liable. A provision has been set up to recognise
further costs associate with settling the supplier.
25. SHARE CAPITAL
THE GROUP AND THE COMPANY
2009
2008
2009
2008
Number of Shares
RM
RM
Authorised:
At beginning of the financial year
Created during the financial year
40,000,000
10,000,000
40,000,000
-
40,000,000
10,000,000
40,000,000
-
At end of the financial year
50,000,000
40,000,000
50,000,000
40,000,000
Issued and fully paid:
At beginning of the financial year
Issued during the financial year
11,050,200
270,000
11,045,200
5,000
11,050,200
270,000
11,045,200
5,000
At end of the financial year
11,320,200
11,050,200
11,320,200
11,050,200
During the financial year, the authorised share capital of the Company has been increased to
50,000,000 ordinary shares by the creation of 10,000,000 ordinary shares of RM1 each.
47
PERS Ref.
1.46(a)
1.8(e)
1.46(b),(c)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
During the financial year, the Company has issued the following shares:
Date of Issue
6 March 2009
1 June 2009
No. of Shares Issued
20,000
250,000
Issue Price
RM2.70
RM4.00
Purposes
Increase working capital
Part finance the acquisition of a subsidiary
The new shares issued rank pari passu in respect of the distribution of dividends and repayment of
capital with the existing shares.
1.74(b)
26. SHARE PREMIUM
Share premium arose from issue of ordinary shares in excess of its par value, as follows:
Date
1 January 2005
1 October 2008
6 March 2009
1 June 2009
Issue of 300,000 shares at an issue price of RM2.50
Issue of 5,000 shares at an issue price of RM2.70
Issue of 20,000 shares at an issue price of RM2.70
Issue of 250,000 shares at an issue price of RM4.00 as part of
the consideration for the acquisition of a subsidiary
THE GROUP
AND THE
COMPANY
RM
450,000
8,500
34,000
750,000
1,242,500
1.74(b)
27. REVALUATION RESERVES
15.82(g)
Revaluation reserves arose from the revaluation of landed property of the Group. Revaluation
reserves are not available for distribution as dividends to the Company’s shareholders.
THE
GROUP
RM
THE
COMPANY
RM
At 1 January 2008
Revaluation surplus
Deferred tax liability on revaluation surplus
At 31 December 2008
Revaluation surplus
Deferred tax liability on revaluation surplus
Transfer to retained profits on disposal
553,718
3,459
(175)
557,002
92,237
(22)
(6,963)
-
At 31 December 2009
642,254
-
48
PERS Ref.
1.46(a)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
1.8(e)
1.46(b),(c)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
1.74(b)
28. TRANSLATION RESERVES
Translation reserves arose from the exchange differences on translation of foreign operations.
1.74(b)
29. RETAINED PROFITS
Effective 1 January 2008, the Company is given the option to make an irrevocable election to move
to a single tier system or continue to use its tax credit under Section 108 of the Income Tax Act,
1967 for the purpose of dividend distribution until the tax credit is fully utilised or latest by 31
December 2013. The Company has elected to continue to use its tax credit under Section 108 of the
Income Tax Act, 1967.
Accordingly, during the transitional period, the Company may utilise the credit in the Section 108
balance as at 31 December 2007 to distribute cash dividend payments to ordinary shareholders as
defined under the Finance Act, 2007.
At the balance sheet date, subject to the agreement by the Inland Revenue Board:
1.
the Company has sufficient tax credit under Section 108 (6) of the Income Tax Act, 1967 to
frank the payment of dividends out of all its retained profits.
2.
the Company has a balance of RM2,827,515 (2008: RM5,064,555) in the tax exempt account to
declare tax exempt dividends.
If the Company does not have sufficient tax credit to frank the payment of dividends, the disclose the
following information:
Subject to the agreement by the Inland Revenue Board, the Company has sufficient tax credit under
Section 108 (6) of the Income Tax Act, 1967 to frank the payment of dividends up to RM659,887
(2008: RM422,950) of its retained profits. The Company is required to pay an additional tax of
RM573,373 (2008: RM1,217,927) to frank the payment of dividends out of all its retained profits.
30. RETIREMENT BENEFIT OBLIGATION
29.125
(b) & (c)
The Group operates a funded Retirement Benefit Plan (the Plan) for its eligible employees in
Malaysia. The amount recognised in the balance sheet of the Plan is as follows:
THE GROUP
2009
2008
RM
RM
Present value of funded obligations
Less: Fair value of plan assets
Unrecognised actuarial losses
Unrecognised past service cost
Net liabilities recognised in balance sheet
THE COMPANY
2009
2008
RM
RM
238,547
(145,158)
93,389
(22,192)
(4,454)
203,796
(106,589)
97,207
(20,283)
(4,684)
-
-
66,743
72,240
-
-
49
PERS Ref.
1.46(a)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
1.8(e)
1.46(b),(c)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
29.125(e)
Changes in the fair value of the plan assets are as follows:
THE GROUP
2009
2008
RM
RM
29.125(d)
THE COMPANY
2009
2008
RM
RM
At beginning of the financial year
Expected return
Actuarial gains
Contributions made
Benefits paid
106,589
5,216
431
43,190
(10,268)
69,409
4,749
212
41,540
(9,321)
-
-
At end of the financial year
145,158
106,589
-
-
76,938
22,279
45,592
349
46,493
13,541
46,124
431
-
-
145,158
106,589
-
-
The plan assets is analysed as follows:
Equity instruments
Cash and cash equivalents
Landed properties
Other assets
29.125(g)
The actual return on plan assets was RM5,647 (2008: RM4,961).
29.125(d)
None of the above plan assets is owned by the Group and the Company. The Group and the
Company do not occupy any of the above properties or use any of the above assets.
29.125(e)
A reconciliation of the present value of funded obligations in the balance sheet is as follows:
THE GROUP
2009
2008
RM
RM
THE COMPANY
2009
2008
RM
RM
At beginning of the financial year
Actuarial losses
Current service cost
Expected interest cost
Benefits paid
203,796
2,340
24,875
17,804
(10,268)
178,538
2,112
17,883
14,584
(9,321)
-
-
At end of the financial year
238,547
203,796
-
-
50
PERS Ref.
1.46(a)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
1.8(e)
1.46(b),(c)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
29.125(f)
Total expense recognised in income statements, included in the administrative expenses (expenses
by function) or employee benefits expenses (expenses by nature) are as follow:
THE GROUP
2009
2008
RM
RM
Current service cost
Expected interest cost
Expected return on plan assets
Expected return on reimbursement right
recognised as an asset
Actuarial losses
Past service cost
Effect on curtailment or settlement
29.125(h)
THE COMPANY
2009
2008
RM
RM
24,875
17,804
(5,216)
17,883
14,584
(4,749)
-
-
-
3,210
-
-
230
-
342
-
-
-
37,693
31,270
-
-
The principal actuarial assumptions used as at the balance sheet date are as follows:
THE GROUP
2009
2008
%
%
Discount rate
Expected rate of return on plan assets
Expected rate of return on
reimbursement right recognised as an
asset
Expected rate of salary increases
Medical cost trend rate
THE COMPANY
2009
2008
%
%
4
5
4
5
-
-
5
8
5
8
-
-
51
PERS Ref.
1.46(a)
1.8(e)
1.46(b),(c)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
31. REVENUE
THE GROUP
2009
2008
RM
RM
8.36(b)(i)
8.36(b)(ii)
7.40(a)
32.50(b)
8.36(b)(iii)
8.36(b)(iv)
8.36(b)(v)
IAS25
Sales of goods
Rendering of services
Contract revenue
Property development revenue
Interest income
Royalty income
Dividend income
Licence fee income
Management fee income
Rental income from investment property
THE COMPANY
2009
2008
RM
RM
202,548
786,938
1,591,278
10,013,736
2,768
2,748,944
78,147
8,118,606
200,718
278,170
734,376
1,172,589
6,932,479
4,159
2,621,434
91,445
7,404,662
86,798
17
291,768
89,949
75
20
236,914
54,609
179
23,743,683
19,326,112
381,809
291,722
32. PROFIT BEFORE TAX
CA9.1(j)
4.30(b)
CA9.1(f)
CA9.1(q)
CA9.1(j)
15.78(f)
7.40(b)
2.40(a)
CA9.1(o)
8.36(b)(v)
1.83,
14.15(c)
a) Profit before tax is stated after charging / (crediting):
THE GROUP
2009
2008
RM
RM
Allowance for doubtful debts:
- related parties
- other than related parties
9,438
13,578
Amortisation of goodwill included in
other expenses #
391,289
471,051
Amortisation of other intangible assets
included in: #
- cost of sales
1,241,168
918,276
- other expenses
199,918
114,628
Auditors’ remunerations
250,900
250,700
Bad debts written off
2,512
1,081
Compensation for impaired property,
plant and equipment
(1,203)
Contract costs recognised #
1,352,588
1,166,701
Cost of inventories recognised as expense
171,678
380,226
Directors’ remunerations:
- fees
180,000
120,000
- salaries, bonuses and allowances
231,450
201,300
- defined contribution plan
25,500
23,540
Dividend income
(1,718)
(2,105)
Depreciation of property, plant and
equipment #
1,228,514
876,403
THE COMPANY
2009
2008
RM
RM
-
-
-
-
25,000
-
20,000
-
-
-
-
-
469
492
52
PERS Ref.
1.46(a)
1.8(e)
1.46(b),(c)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
THE GROUP
2009
2008
RM
RM
6.42(a)
CA9.1(h)
31.30
31.30
CA9.1(g)
8.36(b)(iii)
2.40(c)
23.115(a)
32.50(b)
20.85(b)
20.85(b)
CA9.1(g)
4.30(b)
CA9.1(j)
23.115(b)
2.40(d)
20.85(d)
1.83
Exchange loss (gain):
- realised
- unrealised
(Gain) / Loss on disposal of:
- property, plant and equipment
- investment property
- land held for development
- other investments
- subsidiary
Government grant deducted against
promotional expenses (Note c)
Government grant recognised as other
income (Note c)
Hire of plant and machinery
Interest income from bank deposits
Inventories written down to net realisable
value
Impairment losses recognised, included in
other expenses, of: #
- goodwill
- property, plant and equipment
- land held for development
- other intangible assets
Property development costs recognised #
Provision for legal costs
Provision for warranties
Rental of premises
Research and development costs
expensed off
Reversal of allowance for doubtful debts
Reversal of impairment losses, included
in other income, of: #
- property, plant and equipment
- land held for development
- other intangible assets
Reversal of inventories written down*
Reversal of provision for warranties
Staff costs (Note d) #
THE COMPANY
2009
2008
RM
RM
48,903
90,459
(50,490)
79,948
(760)
(2,659)
(14)
(64,242)
(1,459)
(1,088)
(173)
(15,914)
-
(100)
(100)
2,500
(657)
5,890
(718)
5,605
(152)
(24,474)
293,051
4,930
28
5,011
-
-
-
-
-
31,250
45,303
-
-
37,961
2,046
8,010,989
347
113,718
3,769
643
14,558
986
5,145,983
91,634
2,090
-
-
39,895
(348)
19,998
(732)
-
-
(303)
(14,558)
(895)
(14,694)
(72,911)
490,010
(21,600)
(31,695)
342,001
58,975
38,305
2.17(e)
* Inventories written down in prior financial year have been reversed during the financial year as
the management has successfully secured a higher sales amount for those slow-moving
inventories.
2.40(b)
#
These items are disclosed on the face of the income statements if the entity chooses to present income statements by the
nature of expenses.
53
PERS Ref.
1.46(a)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
1.8(e)
1.46(b),(c)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
27
b) Finance costs
THE GROUP
2009
2008
RM
RM
Interest expense on:
Term loans
Bank overdrafts
Hire purchase
Finance lease
Other short-term bank borrowings
Less interest expenses capitalised under:
Property, plant and equipment
Property development costs
Amount charged to income statements
55,439
28,322
6,966
7,652
137,410
235,789
(325)
(714)
(1,039)
234,750
62,288
23,411
7,226
8,026
156,608
257,559
(642)
(368)
(1,010)
256,549
THE COMPANY
2009
2008
RM
RM
10,172
4,914
15,418
30,504
12,716
5,432
6,114
24,262
-
-
30,504
24,262
Finance costs capitalised as part of the cost of the qualifying assets arose from funds that are
borrowed generally. The finance costs capitalised are determined by applying a capitalisation rate
of 7% (2008: 7.5%) to the expenditures on that asset.
c) Government Grants
31.40(b)
*1 If the government grant related to income is presented as a credit in the income statements
During the financial year, a subsidiary obtained a grant of RM10,000 in respect of approved
promotional expenditure for promoting Malaysian brands overseas. The grant is presented as a
component of the other income on the income statements.
31.40(b)
*2 If the government grant related to income is deducted in reporting the related expense
During the financial year, a subsidiary obtained a grant of RM10,000 in respect of approved
promotional expenditure for promoting Malaysian brands overseas.
31.30
The grant is deducted in reporting the related promotional expenditures, included in other
expenses:
THE GROUP
2009
2008
RM
RM
Promotional expenses before deduction of
grant
Grant recognised
Promotional expenses after deduction of
grant
THE COMPANY
2009
2008
RM
RM
17,456
(10,000)
6,891
-
-
-
7,456
6,891
-
-
54
PERS Ref.
1.46(a)
1.8(e)
1.46(b),(c)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
d) Staff costs
THE GROUP
2009
2008
RM
RM
29.47
29.147
Salaries, bonuses and allowances
Contribution to defined contribution plan
Expenses on defined benefits plan
Termination benefits
Other employees benefits
THE COMPANY
2009
2008
RM
RM
351,696
37,123
37,693
769
62,729
226,717
26,378
31,270
57,636
53,742
4,385
848
34,489
3,299
517
490,010
342,001
58,975
38,305
33. INCOME TAX EXPENSE
THE GROUP
2009
2008
RM
RM
25.77
25.78(a)
CA9.1(l)
Current tax expense
Current year
- Malaysia
- payable outside Malaysia
Share of tax expense in
- associates
- jointly-controlled entities
25.78(b)
Under (over) provision in prior years
25.78(c)
25.78(d)
Deferred tax expense
Temporary differences
Changes in tax rates
Total income tax expense
THE COMPANY
2009
2008
RM
RM
655,499
300,457
580,664
256,348
7,869
-
10,239
-
49,654
75,734
1,081,344
3,076
1,084,420
19,681
74,931
931,624
(4,801)
926,823
7,869
7,869
10,239
(10,239)
-
193,176
2,101
195,277
316,790
316,790
-
-
1,279,697
1,243,613
7,869
-
55
PERS Ref.
1.46(a)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
1.8(e)
1.46(b),(c)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
25.79(c)(i)
The income tax expense is reconciled to the accounting profit at the applicable tax rate as follows:
THE GROUP
2009
2008
RM
RM
Profit before tax
25.79(d)
Tax at domestic income tax of 28% (2008:
28%) #
Tax effects of:
Changes in tax rates for certain overseas
subsidiaries
Non-taxable income
Non-deductible expenses
Tax incentives
Utilisation of previously unrecognised
tax losses
Differential tax rate for:
- small & medium companies in Malaysia
- subsidiaries in foreign countries
- property gain tax
Under (over) provision in prior years
Total income tax expense
#
THE COMPANY
2009
2008
RM
RM
8,278,297
6,043,207
179,723
131,309
2,317,923
1,692,098
50,322
36,767
2,101
(31,114)
417,659
(1,057,267)
(36,767)
420,692
(608,738)
(57,549)
15,096
(44,301)
17,773
(276)
(127)
-
(200)
(359,806)
(12,399)
3,076
(200)
(218,544)
(4,801)
-
1,279,697
1,243,613
7,869
(10,239)
-
Assumption tax rate
34. DIVIDENDS
1.85
On 1 April 2009, the Company paid a 10% final tax exempt dividend (total dividend of
RM1,105,020) in respect of the previous financial year. The net dividend per share was 10 sen.
On 31 August 2009, the directors declared a 10% interim tax exempt dividend (total dividend of
RM1,132,020) in respect of the current financial year. The dividend was paid to the shareholders
registered on 31 October 2009. The net dividend per share was 10 sen.
1.74(c)
19.11
The directors have proposed a 10% final tax exempt dividend in respect of the current financial
year. The dividend is subject to approval by the shareholders at the forthcoming Annual General
Meeting and has not been included as a liability in the financial statements. Total dividend
payable is RM1,132,020, and the net dividend per share is 10 sen.
56
PERS Ref.
1.46(a)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
1.8(e)
1.46(b),(c)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
11.47(b)
35. ACQUISITION OF SUBSIDIARY
On 1 June 2009, the Company acquired the entire equity interest in AXP Property Sdn. Bhd., a
company incorporated in Malaysia and principally engaged in property investment and
development, for a total consideration of RM1,500,000.
The goodwill arising from the acquisition of AXP Property Sdn. Bhd. is attributable to the
anticipated profitability of the acquired business and synergy expected to arise from the acquisition
to the Group’s business in accordance with the Group’s intention to diversify into property
development and investment segment.
The net assets acquired in the transaction, goodwill and cash flow arising therefrom, are as follows:
At date of
acquisition
RM
5.40(d)
5.40(d)
5.40(d)
5.40(c)
5.40(d)
5.40(d)
5.40(c)
5.40(d)
Property, plant and equipment
Investment property
Land held for development
Property development costs
Trade and other receivables
Cash and bank balances
Trade and other payables
Progress billings
Current tax liabilities
Bank overdrafts
Other bank borrowings
Deferred tax liabilities
Goodwill on consolidation
5.40(a)
5.40(b)
Purchase consideration
Less: Purchase consideration satisfied by issuance of shares
Purchase consideration satisfied by cash
Cash and cash equivalents acquired
Acquisition of subsidiary, net of cash acquired
500,233
1,217,852
1,495,060
987,342
112,368
771
(227,684)
(300,000)
(23,469)
(800,519)
(2,790,306)
(68,900)
102,748
1,397,252
1,500,000
(1,000,000)
500,000
799,748
1,299,748
57
PERS Ref.
1.46(a)
1.8(e)
1.46(b),(c)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
The effects of the acquisition on the financial position as at the balance sheet date are as follows:
At
31.12.2009
RM
Property, plant and equipment
Land held for property development
Property development costs
Investment property
Trade and other receivables
Cash and bank balances
Trade and other payables
Progress billings
Current tax liabilities
Bank overdrafts
Other bank borrowings
Deferred tax liabilities
Increase in Group’s net assets
543,234
455,719
691,144
543,607
345,678
4,324
(265,890)
(97,597)
(45,678)
(657,890)
(904,784)
(68,901)
542,966
The effects of the acquisition of AXP Property Sdn. Bhd. on the financial results of the Group during
the financial year are as follows:
RM
Revenue
Expenses
Increase in Group’s net profit
1,147,392
(860,844)
286,548
58
PERS Ref.
1.46(a)
1.8(e)
1.46(b),(c)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
36. DISPOSAL OF SUBSIDIARY
On 1 December 2009, the Company disposed off its entire interest in a subsidiary, AE Packaging
Sdn. Bhd.
The net assets of AE Packaging Sdn. Bhd. at the date of disposal were as follows:
1.12.2009
RM
5.40(d)
5.40(d)
5.40(c)
5.40(d)
5.40(d)
5.40(c)
5.40(d)
5.40(d)
5.40(a)
5.40(b)
Property, plant and equipment
Inventories
Trade and other receivables
Cash and bank balances
Trade and other payables
Current tax liabilities
Bank overdrafts
Other bank borrowings
Deferred tax liabilities
Attributable goodwill
839,808
543,788
212,566
1,986
(880,600)
(17,166)
(201,716)
(416,238)
(37,543)
176,930
Net assets of AE Packaging Sdn. Bhd.
Gain on disposal
221,815
1,459
Total consideration
Cash and cash equivalents disposed off
223,274
199,730
Proceeds from disposal of subsidiary, net of cash disposed
423,004
37. PURCHASES OF PROPERTY, PLANT AND EQUIPMENT
THE GROUP
2009
2008
RM
RM
5.43
5.44(b)
Purchases of property, plant and
equipment
Less interest expense capitalised
Less purchases made directly by:
Long-term borrowings *
Hire purchases
Purchases of property, plant and
equipment made by cash payments
THE COMPANY
2009
2008
RM
RM
4,264,626
(325)
748,665
(642)
677
-
1,088
-
(142,219)
(413,758)
(35,799)
(117,688)
-
-
3,708,324
594,536
677
1,088
* Note: If the assets are acquired by directly assuming the related borrowings, the transaction is
deemed to be a non-cash transaction.
59
PERS Ref.
1.46(a)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
1.8(e)
1.46(b),(c)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
5.45
38. CASH AND CASH EQUIVALENTS
THE GROUP
2009
2008
RM
RM
Fixed deposits with licensed banks
Cash and bank balances
Bank overdrafts
5.48
5.48
5.28
Less: Fixed deposits pledged
Less: Cash at bank held under Housing
Development Account
Cash and cash equivalents as previously
reported
Effect of foreign exchange rate changes
THE COMPANY
2009
2008
RM
RM
206,625
97,305
(280,316)
23,614
(3,540)
271,791
215,132
(324,225)
162,698
(3,540)
128
(36,068)
(35,940)
-
214
(44,396)
(44,182)
-
(56,965)
(176,870)
-
-
(36,891)
432
(17,712)
389
(35,940)
-
(44,182)
-
(36,459)
(17,323)
(35,940)
(44,182)
39. COMMITMENTS
15.79(d)
As the balance sheet date, the Group and the Company have the following commitments for the
acquisition of the property, plant and equipment:
THE GROUP
2009
2008
RM
RM
Contracted but not provided for
Authorised but not contracted for
16.59
THE COMPANY
2009
2008
RM
RM
66,504
124,000
48,040
324,000
8,593
-
6,594
-
190,504
372,040
8,593
6,594
The Group’s share of the capital commitments for the acquisition of the property, plant and
equipment of the jointly-controlled entities are as follows:
THE GROUP
2009
2008
RM
RM
Contracted but not provided for
Authorised but not contracted for
459,000
212,000
982,000
36,000
671,000
1,018,000
60
PERS Ref.
1.46(a)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
1.8(e)
1.46(b),(c)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
5.34 (a) &
(d)
The total minimum lease payments under non-cancellable operating leases of the Group for the
leasing of certain of the office premises, with an average lease term of 8 years, is as follows:
THE GROUP
2009
2008
RM
RM
Within one year
Later than one year and not later than
five years
Later than five years
THE COMPANY
2009
2008
RM
RM
5,430
4,390
-
-
34,500
12,390
28,610
20,010
-
-
52,320
53,010
-
-
40. CONTINGENT LIABILITIES
16.58
Contingent liabilities arising from the interest in jointly-controlled entities
THE GROUP
2009
2008
RM
RM
Unsecured
- Guarantee given to banks in respect of bank facilities utilised by
AXP-China Co., Ltd.
- Guarantee given to suppliers of AXP-Singapore Pte. Ltd. in
respect of facilities utilised
12.36
31,040
45,210
7,620
4,320
38,660
49,530
Contingent liabilities arising from the interest in associates
THE GROUP
2009
2008
RM
RM
Unsecured
- Guarantee given to an offshore bank for bank facilities utilised by
SERP Sdn. Bhd.
- Guarantee given to the creditors of AE (HK) Limited jointly with
other investors
605,040
543,790
4,360
3,520
609,400
547,310
Contingent liabilities of the Company
THE COMPANY
2009
2008
RM
RM
Unsecured
- Guarantee given to subsidiaries for bank facilities granted
354,789
458,791
61
PERS Ref.
1.46(a)
MODEL GROUP SDN. BHD. (Company No. 12345678-A)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
1.8(e)
1.46(b),(c)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
20.87
During the financial year, a customer of a subsidiary took legal action against the said subsidiary for
default in payment of the warranty claims to the said customer amounting to RM40,000. However,
based on legal opinion and the warranty agreement, the said subsidiary has a merit to win the legal
suit. Thus, no provision has been made in the financial statements of the Group. However,
associated legal costs have been accrued in the balance sheet.
41. EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE
19.19
19.21
Subsequent to the balance sheet date,
a) the Company has obtained the court approval to appeal against a legal suit won by a creditor at
the balance sheet date. Total amount claimed by the creditor is RM200,000. No provision has
been made in the financial statements as the advocator of the Company estimates that the
Company has a good chance to win the litigation.
b) the Company has entered into an agreement with third parties to acquire the entire interest in Be
Good Limited, a company incorporated in Bermuda, for a total cash consideration of RM5
million. This company is principally an investment holding company with investment in several
companies in North America involving in software development and consultancy services. The
proposed acquisition is expected to strengthen the Group’s present in the software industry in
this region. The acquisition of the interest will be funded by internally generated fund and issue
of shares as disclosed in note (c) below and is expected to be completed in the second quarter of
the financial year ending 31 December 2010 if the proposed acquisition is approved by the
relevant authorities and the shareholders of the Company.
c) the directors of the Company proposed to issue additional 660,100 new ordinary shares of
RM1.00 each at RM5.00 per ordinary share via 2-for-1 Right Issue and 200,000 new ordinary
shares of RM1.00 each at RM5.00 per ordinary shares to selected institutional investors to partly
finance the acquisition of Be Good Limited. The new shares to be issued rank pari passu in
respect of the distribution of dividends and repayment of capital with the existing shares.
d) one of the Group’s debtors has gone into liquidation. The total outstanding amount due from
this debtor amounts to RM50,000. Of the total outstanding amount, the Group expects to recover
approximately RM20,000. An allowance for doubtful debt has been made for the estimated
unrecoverable amount.
42. AUTHORISATION FOR ISSUE OF THE FINANCIAL STATEMENTS
19.16
The financial statements of the Company were authorised for issue by the Board of Directors on 31
January 2010.
62